The promise of the central bank and the dollar that shook the world of the far-right candidate who won the primary elections

Far-right populist candidate Javier Milei finished first in the primary elections held yesterday ahead of Argentina’s October 22 presidential election.

According to preliminary results, Milei unexpectedly received 30 percent of the vote. Milei was followed by the main opposition bloc with 28 percent and the currently ruling “Peronist” alliance with 27 percent.

Primary elections are held throughout the country to determine the candidates who will compete in the presidential election.

THE DOLLAR PROMISE

Known as a congressman, economist and former television personality, Milei promises to implement a radical neoliberal program in the economy that includes cuts and privatizations in public spending.

One of the most famous promises of Milei, 52, in his country and around the world is to use the US dollar instead of the country’s currency, the peso, that is, to completely dollarize the country.

The Argentine peso is among the currencies that have lost the most value in the world, along with the Turkish lira, in recent years. Argentina, along with Türkiye, is one of the countries with the highest inflation.

By promising that the Central Bank of Argentina would be closed if it comes to power, Milei also announces that he will close the doors of the ministries of Education, Health and the Environment in the face of a radical cut in public spending.

Milei, who has been compared to former US President Donald Trump and former Brazilian President Jair Bolsonaro, also says he will encourage civilian arms and ban abortion, like many far-right counterparts.

TRIPLE DIGIT INFLATION

Argentina, whose consumer inflation was announced in June at 115.6 percent a year, has defaulted many times in the past 20 years, failing to pay its foreign debts on time.

Although the Central Bank of Argentina raised interest rates from 75 percent to 97 percent this year, the interest rate hikes were still not enough to control inflation.

In the country, which is an exporter of agricultural commodities, the drought also reduced foreign exchange earnings, fueling currency depreciation and food inflation.

Argentina, which signed a record $57 billion debt deal with the IMF in 2018, knocked on the IMF’s door again in 2022 and signed a new $44 billion debt restructuring agreement.