Argentine Economy Minister Luis Caputo addressed the United States Chamber of Commerce in Argentina (AmCham Argentina) on Tuesday, where he defended his first three months in office and proffered that, although they are moving towards some of President Milei’s core proposals like dollarization, they will continue to remain on hold.  

Caputo said that it is not yet time to remove the government’s restrictions on buying and selling foreign currency, known as the cepo, a move long promised by Milei. “We do things when we know they will go well. We prefer to move carefully – we will do it once we know it won’t generate problems for Argentines.”

The same principle applies to Milei’s controversial dollarization plan, or “currency competition,” a scheme wherein consumers choose what currency they use. “It will generate a faster recovery,” stated Caputo, in reference to the plan. 

According to the economy minister, the country does not have the patience for a gradual decrease in inflation. “Argentina has to lower it dramatically, and the currency competition aims to do that; it is a monetary system that will make inflation collapse,” he said. 

“Our first goal is to bring in a currency competition when the conditions are right,” he added. When it will happen remains unclear. “I won’t offer a date because I don’t know,” Caputo said, noting that the Central Bank presently lacked sufficient reserves for the scheme to be enacted. 

Despite these caveats, the minister said his nascent tenure has thus far “surprised the majority for its positive results.” “Economists expected a more disruptive scenario, many predicted hyperinflation, with the dollar at two, three, others at eight thousand,” said the economy minister. “It was a very good three months… but this is a long road.”

Following a 54% devaulation of the peso in December, the currency’s value on parallel exchange markets has held relatively steady, even dipping below 1000 pesos to the dollar for the first time in months. 

“We are in a much better situation than the one we received,” said Caputo, adding that he expected Argentina’s monthly inflation to be in the single digits by the end of the year. Since Milei took office, the country’s monthly rise in consumer prices peaked at 25% in December, before slowing to 20.6% in January. 

Caputo also stated that the IMF could potentially expand its loan to Argentina. “The Fund is open to a new program and, if reasonable, offering more money as well,” he said, adding that talks are still in the early stages. 

Caputo’s talk came just minutes before national statistics agency INDEC announced that inflation had cooled to 13.2% in February. The figure brings annual inflation to 276%, the highest in more than three decades. 

Still, Caputo was bullish on the economy’s outlook. Under his watch, the fiscal deficit shrank by five GDP points, the monetary base contracted by 38%, and monetary financing of the deficit had ended, he said. 

“​​From the first minute, the mandate has been zero deficit while protecting the most vulnerable,” stated Caputo, parroting language used by U.S. Ambassador Marc Stanley earlier in the day, who voiced Washington’s concerns that such dramatic fiscal reforms could threaten economically vulnerable Argentines. 

When asked about the government’s controversial piece of mega-legislation, the omnibus bill, which failed last month in Congress, Caputo said that its passage is “super important.” 

“We’re fighting against the political bias of some governors,” remarked the economy minister, echoing President Milei’s criticism of gubernatorial opposition to the measure. “They’re playing politics, they’re not dying to see things go well.”