Argentina’s Economy Minister, Luis Toto Caputo, confirmed that the Government of President Javier Milei has ruled out dollarization, opting instead to maintain the current exchange rate band system with a floating US dollar, reports 24brussels.
In a recent television interview, Caputo emphasized the government’s objective to establish a monetary and exchange mechanism that prioritizes rapid economic growth. He reiterated a bilateral agreement with the United States, which includes a substantial US$20 billion swap and arrangements to purchase Argentine bonds and currency.
This support from the US, encouraged by Donald Trump’s administration, aims to alleviate pressure on the dollar while ensuring financial stability in Argentina, particularly in view of the upcoming midterm elections on October 26. The US plans to continue purchasing pesos on various markets, thus reinforcing Argentina’s current exchange framework.
Caputo firmly dismissed allegations that the White House was imposing political conditions on Argentina, labeling the support as “the most important news” and highlighting it as a testament to the backing of the leading global power for Argentina’s economic strategy. He also commended President Milei’s commitment to strengthening ties with the US, stating that the United States regards Argentina as its primary ally in the region. “The president invested a lot of time in this relationship,” he remarked, noting that the US has a vested interest in demonstrating the success of its allies.
Moreover, Caputo clarified that the agreement with the US does not entail the cancellation of the existing swap agreement with China, countering prior statements by US Treasury Secretary Scott Bessent, who suggested that Milei’s government was committed to sidelining China from Argentina.
Addressing criticism from opposition leaders who argue that the US agreement threatens national sovereignty, Caputo dismissed these claims as “nonsense.” He affirmed that there would be no devaluation following the elections, reaffirming the continuity of the exchange rate band system. He acknowledged the internal challenge facing the government in rebuilding trust with provincial governors, admitting that a prior disengagement from political engagement was a misstep.
Looking ahead, Caputo anticipated “likely an announcement on Tuesday” during the scheduled meeting between Presidents Milei and Trump at the White House.
