Argentina Aims to Slash Inflation, Lift Currency Restrictions This Year

Argentina’s economic chief, Luis Caputo, expressed optimism about soon reducing monthly inflation to single digits.

By mid-2024, he also looks to remove limits on currency use if finances keep getting better.

In talks with “La Nación +” TV, Caputo saw February’s price rises dropping sharply from January’s 20.6%.

He credits tight spending and money policies from President Javier Milei’s team for this expected fall.

Caputo believes, “Inflation this month might hit closer to 10% than 20%. Thanks to our strict financial and monetary steps, we see a big drop coming.”

He added, “Cutting inflation quickly and significantly will help us escape the crisis faster… We once thought growth would return in 2025. Now, feeling more upbeat, we foresee it by late 2024.”

Yet, Caputo cautioned that the toughest crisis moments could arrive in March and April amid the ongoing recession and high inflation.

On currency rules, Caputo mentioned a mid-year chance to scrap them, echoing the International Monetary Fund’s (IMF) outlook.

“The IMF expects us to remove the ‘cepo’ around June or July. If things keep improving, it’s doable,” he said, noting the focus is on fixing the Central Bank’s finances.

He shared that boosting the bank’s funds, including a 20% rise in international reserves, has been key.

“Buying over $7 billion has greatly improved our reserves,” noted Caputo.

Argentina Aims to Slash Inflation, Lift Currency Restrictions This Year

Finally, he expects to end the PAIS Tax this year. This tax adds a 30% fee on buying foreign currency and overseas card payments.

“We plan to reduce the PAIS tax soon, aiming to eliminate it within the year,” Caputo confirmed.

This effort shows Argentina’s steps to stabilize its economy, aiming for growth and more financial freedom.

The moves could signal a shift towards a stronger economic foundation, reflecting how nations tackle inflation and monetary controls on the global stage.