Argentina devalues peso, slashes public spending

(Sharecast News) - Argentina's new hard-right government has devalued its currency by more than half in its first package of economic measures that include slashing public spending.

The plans, unveiled by economy minister Luis Caputo in a televised address, also include cutting energy subsidies and cancelling tenders for public works. New president Javier Milei took office on Sunday.

Argentina's peso was set to 800 per dollar, from 366.5. Caputo said the country's central bank would target a monthly devaluation of 2% and would announce new monetary measures on Wednesday.

"The objective is simply to avoid catastrophe and get the economy back on track," Caputo said. "There is no more money."

"If we carry on as we are, we will have hyperinflation. Out of the last 123 years, Argentina ran a fiscal deficit in 113 . . . we have come to solve the addiction to fiscal deficits," he added.

The International Monetary Fund said it was in favour of the measures.

"These bold initial actions aim to significantly improve public finances in a manner that protects the most vulnerable in society and strengthen the foreign exchange regime," it said in a statement.

Reporting by Frank Prenesti for Sharecast.com