Argentina’s Javier Milei backs away from dollarisation as central bank pick rejects role

https://ft.com/content/f574a3af-fec2-41ed-b093-40bc9b20bdd2

Milei’s office said on social media site X on Friday that the closure of the central bank was a “non-negotiable matter” despite “false rumours that have been spread”, without mentioning dollarisation.

Milei has not yet confirmed an alternative pick for central bank chief but local media reports have said Demian Reidel, who served as a vice-president at the institution under then-president Mauricio Macri, is being considered.

Local financial markets are showing increasing signs of stress as Milei works to finalise the key economy portfolios ahead of his inauguration on December 10.

The central bank is struggling to find buyers for short-term peso-denominated debt that it issues to suck local currency out of the system, signalling that its efforts to contain inflation are flagging in the face of market uncertainty.

The dollar was trading at about 1,020 pesos on the black market on Thursday, almost triple the officially fixed rate of 364 to the dollar.

Milei’s biggest challenge is to dismantle an elaborate web of price and currency controls spun by the outgoing Peronist administration without triggering hyperinflation and economic collapse.