After Argentina's new ** Milley took office, he ushered in a large-scale reform of the country's economy and institutions. On the same day, he announced the merger of nine departments and the halving of the original 18 departments, in order to implement a fiscal saving plan. However, the biggest problems facing Argentina at the moment are inflation and the instability of the currency exchange rate. The Argentine peso has always been supported by strict capital controls, but even so, the currency continues to depreciate, bringing a full-fledged crisis to society and an increase in poverty. Milley's plan of "total dollarization" is difficult to realize in the short term due to the limitations of objective laws. Argentina's newly appointed Minister of Economy Caputo announced a new policy on the 12th: the official exchange rate was lowered to 800 pesos per dollar, a depreciation of as much as 54%. This policy of self-depreciation is not unexpected, but what the outside world did not expect was that the central bank adjusted so much. Previously, companies generally believed that the exchange rate would be slowly lowered, but Milley had taken a "halved" intervention.
This is considered to be the first step in Milley's so-called "shock **" plan, but at the same time, foreign companies in Argentina have expressed dissatisfaction with this, because foreign imports and exports have been severely damaged, and some companies have not even been able to pay the cost of orders and have lost money. Faced with this situation, Milley also made a request to China on the 12th, hoping to expand the scale of currency swaps between the two countries. Previously, Argentina reached a currency swap agreement with China in the last session, and in June this year, it used the yuan for the first time to repay the debt of the International Monetary Organization. Xin** also expressed its willingness to agree to expand monetary cooperation with China. It is reported that the Chinese side agreed to raise the currency swap target to $6.5 billion. However, Milley is not satisfied with this number, and he wants to further expand the scale of currency exchange with China, and there is no cap. So, as a ** who proposed "total dollarization", why did Milley choose to expand the currency exchange with China first?
People in the financial industry believe that Argentina is currently unable to obtain a large amount of US dollars, including loans, due to the limitations of foreign exchange reserves, debt size and credit problems. Therefore, expanding currency exchange with China can provide Argentina with more financial support and a stable exchange rate. Strengthening cooperation with China can also provide Argentina with more development opportunities and lay a solid foundation for economic recovery. In general, the new Argentine ** Milley quickly initiated the reform of the country's economy and institutions after taking office. He aimed to tackle issues such as inflation and exchange rate instability through measures such as the abolition of sectors and the depreciation of the peso. At the same time, he also hopes to provide Argentina with more financial support and development opportunities by strengthening monetary cooperation with China. These measures will undoubtedly play a positive role in Argentina's economic recovery. Argentina's currency crisis has attracted a lot of attention. Faced with the depreciation of the peso and the debt problem, Argentina** tried to guarantee its debt in yuan, but this practice has sparked a series of controversies.
Although the peso has seen some upturn in the short term, in the opinion of economic experts, this does not mean that the peso has long-term trust and investment value. If Argentina's policies ultimately fail, the economy could face an even more severe collapse and the value of the currency will be cast a bigger shadow. In the face of a currency crisis, Argentina** tried to use the renminbi as an "intermediary currency" to guarantee the debts of both countries. This is partly a reflection of Argentina's efforts to resolve the currency crisis, but it has sparked a number of controversies. Although the peso has seen some upturn in the short term, economic experts point out that this does not mean that the peso is worthy of long-term trust or investment. It is worth mentioning that if Argentina's policy ultimately fails, it could lead to an even more severe economic collapse and a bigger blow to the value of the currency. Under such circumstances, does the renminbi have an emergency and turnover effect on the Argentine peso?Will monetary policy bring stability and development to the Argentine economy?
These questions are worthy of our in-depth and thoughtful thinking. In addition, Argentina** has tried to use the renminbi as an "intermediary currency" to guarantee the debts of the two countries. This practice has caused a lot of controversy. Although the peso has seen some upturn in the short term, economic experts point out that this does not mean that the peso is worthy of long-term trust or investment. It is worth mentioning that if Argentina's policy ultimately fails, it could lead to an even more severe economic collapse and a bigger blow to the value of the currency. In this regard, one commentator pointed out: "For example, if the exchange agreement of 6.5 billion US dollars in October is followed, the Argentine peso converted to the renminbi (against the US dollar) at that time has depreciated to less than half of its original value in December;In this case, what credibility do they have to continue to demand the expansion of the exchange?It can only be said that the crazy actions of Argentina are terrible.
In the context of this currency crisis, whether the renminbi can become a lifesaver for the Argentine peso is still an issue that needs to be studied and observed in depth. Opinions differ, but we need to have a clear and rational understanding of Argentina's currency crisis in order to provide better support and advice for its future development.