Argentina's President, Javier Milei, has announced the second phase of his economic plan, which involves swapping out notes held at the Central Bank for new Treasury debt. This move aims to close one of the sources of monetary emission that risked further fueling annual inflation. The stock of one-day repo notes stood at 17.5 trillion pesos ($19.2 billion) through June 27. By phasing out these notes and replacing them with new Treasury notes, the Argentine central bank can move toward interest rates that exceed inflation without increasing its own debt. The International Monetary Fund has approved of these measures [9615d75d].
Milei's administration has also secured congressional approval for his reforms, which aim to reintroduce income taxes and encourage foreign investment. The third phase of Milei's economic plan will include the end of currency controls. However, the government has stated that it will not abruptly devalue the peso or accelerate the pace at which the currency depreciates. Milei's ability to get things done with only a legislative minority has been demonstrated by this announcement, which comes after his legislative win [9615d75d].
Investors have expressed concerns about the sustainability of the government's currency policy in light of Milei's reforms. However, the measures implemented in the second phase of the economic plan have been approved by the International Monetary Fund, which indicates a level of support and confidence in Milei's administration [9615d75d].
Economist Javier Milei has proposed a new economic phase for Argentina, advocating for zero monetary issuance. Milei argues that the current monetary system in Argentina is unsustainable and that the government should stop printing money. He believes that zero monetary issuance would lead to a stable currency and economic growth. Milei's proposal has gained attention in the cryptocurrency community, as it aligns with the principles of decentralization and limited supply found in cryptocurrencies like Bitcoin. However, critics argue that zero monetary issuance could lead to deflation and economic stagnation. The debate over Argentina's monetary policy continues as the country faces ongoing economic challenges [89e5e333].