According to the Argentine "Clarion" **December 13**, Argentina's new ** Minister of Economy Luis Caputo announced the first batch of economic measures for Milley ** on the 12th. These include the reduction of the official exchange rate to 800 pesos per dollar, which means that the peso depreciates by 54%.
"We will lower the official exchange rate so that the production sector has the appropriate incentives to increase production, in addition to a temporary increase in state taxes on imports and withholding duties on non-agricultural exports," Caputo said. In this way, we can better benefit exporters and balance the tax burden across all sectors and end discrimination in the agricultural sector. Once the emergency is over, we will continue to push forward with the elimination of all export duties, which is an unjustified tax, we don't like it, it hinders Argentina's development. ”
In addition, the new ** will work to open up imports. "We will replace the system for the import of goods from Afghanistan with a statistical and information system that does not require a prior approval permit," Caputo said. Discretion will end and transparency in the import approval process will be guaranteed. In other words, whoever wants to import can do it. ”
The new** will also reduce the number of ministries from 18 to 9 and the Secretariat from 106 to 54 as planned, which will result in a reduction of more than 50 per cent of senior posts in the public service and a 34 per cent reduction in total posts.
Other economic measures include a significant reduction in free transfers from the state to the provincial level, a ban on new public works and the cancellation of tenders that have been approved but not yet initiated, and cuts in subsidies in the energy and transport sectors.
According to Agence France-Presse on December 12, the inauguration of Argentine ultra-liberal Javier Milley on the 10th announced on the 12th that it would depreciate its national currency, the peso, by more than 50%, to 800 pesos to 1 dollar, with the aim of stabilizing the economy plagued by inflation and debt for a long time.
The peso devaluation is part of a series of "emergency" measures announced by Argentine Economy Minister Caputo, which also includes the reduction of public subsidies for energy and transport. Previously, the exchange rate of the peso was just under 400 pesos to 1 dollar, which was considered notoriously undervalued.
In his speech, Caputo explained that these measures are aimed at avoiding the "catastrophe" of hyperinflation.
"The root of our problem has always been the budget," Caputo said. In his opinion, the Argentines supported Javier Millet with an overwhelming majority, which shows that they understand that "there is no money".
The depreciation of the currency, combined with the long-term reduction in transport and energy subsidies, is bound to have a strong negative impact on the purchasing power of Argentines in the first place, 40% of whom live below the poverty line.
Caputo assured that Argentina** will continue to implement social programs to help people find employment and "strengthen social policies for those in need, without intermediaries", such as the "food card" (vouchers for the most vulnerable).
Caputo also announced that, in order to tighten the budget, the state "will no longer bid on" public works projects and will cancel signed contracts that "have not yet begun".
"Infrastructure projects in Argentina will be implemented by the private sector, as the state has neither the money nor the funds** to complete them," he explained. ”
On the 12th, a store in Buenos Aires, Argentina, displayed a private exchange rate**, from top to bottom, of the US dollar, the euro and the Brazilian real against the Argentine peso. (AFP).
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