Following the country’s rejection of its BRICS invitation, Argentina is set to see its Peso devalue more than 50% under the newly elected president, Javier Milei. The country’s new regime has recently enacted a host of governmental budget cuts. However, the new reforms should still massively affect the country’s currency.
Argentina was one of six countries announced in the BRICS alliance’s first expansion effort. However, the Latin American nation was also the first to reject such an invitation. Now, Milei is set to move forward with his plan to dollarize the economy.
Argentina Peso Suffering Under New Economic Reforms
The economic difficulties facing Argentina have been well-documented over the last year. Indeed, the nation has experienced unimaginable inflation that has hindered the effectiveness of its currency. Ultimately, the country opted to change course, selecting a new President during the October elections. However, his first executive orders have not altered the trajectory of the nation’s economic state yet.
Specifically, after declining the BRICS invitation, Argentina has seen its Peso on pace to devalue by more than 50% under newly elected president Javier Milei. Indeed, Milei enacted his first action as an executive when he eliminated a host of financial ministers. The move was made to drastically cut government spending.
Milei has long expressed his desire to eventually dollarize the Argentinian economy. Yet, many experts have stated that the development would not have the impact that the new president would have hoped. After its continued devaluation, the peso is currently down 78% year-to-date.
Despite being a key part of BRICS expansion plans, the country’s new regime rejected its invitation. Specifically, they stated that there was no inherent benefit in joining the alliance. Considering Milei’s dollarization hopes, it appears as though his connection to the West limited the prospects of joining the multipolar entity.