Buenos Aires, Argentina — The Argentine Peso (ARS) fell 20% against the US dollar on Monday following the surprising victory of Libertarian pre-candidate Javier Milei in the country’s presidential primary elections held on Sunday.
When the markets opened at 10:00 AM on Monday, Argentines witnessed a spike in the legal dollar rate managed by Argentina’s Central Bank, shooting to ARS 360 per dollar from ARS 300 per dollar when markets closed last Friday afternoon.
Argentina’s government decided to devalue the country’s currency by 20% at least until the October 22 general elections, while also increasing the interest rates by around 21%.
According to some analysts, Argentina’s head of the Central Bank, Miguel Pesce, foresaw pressure from exchange markets after the surprising election result and chose to devalue the Argentine Peso instead of losing national reserves.
The informal dollar market in Argentina, known as the “blue market,” also reacted to Milei’s victory, with dollar prices rising from ARS 600 per dollar last Friday to ARS 685 per dollar on Monday afternoon.
Milei, an outspoken political outsider and fan of former United States President Donald Trump, has previously said he would peg Argentina’s struggling economy to the dollar and abolish the country’s Central Bank.