In what currency should you manage your savings? The question asked by Radio Mitre to ultraliberal candidate Javier Milei on Monday, October 9, marked the start of a currency panic and a minor political storm. "Never in pesos, never in pesos! (...) It has less value than excrement. This waste is not even used to make fertilizer," retorted the frontrunner for the upcoming October 22 presidential election, in his customary colorful rhetoric.
As a result, the national currency has plummeted. On the parallel market, it has exceeded the symbolic threshold of one dollar for 1,000 pesos, compared with 880 pesos previously. The official exchange market (one dollar for 365 pesos at the same time) remains controlled by the State, through a series of mechanisms. A devaluation of the order of 18% had already been initiated in mid-August. But the parallel market is being closely watched, as it serves as a thermometer and a forum for exchange for the majority of economic players, especially savers.
Many have been persuaded by these statements to withdraw pesos from their bank accounts – sometimes hoarded in interest-bearing passbooks – and have exchanged them for US dollars. On October 10, in the midst of the currency jitters, Ramiro Marra, figurehead of the ultraliberal coalition La Libertad Avanza ("Freedom Advances") and candidate for the post of head of government of the city of Buenos Aires, insisted in a message published on X (formerly Twitter): "Today more than ever: don't save in pesos. Take care of your money, it's been hard to earn."
The president, Alberto Fernandez (center-left), who is not standing for re-election and has remained a low profile politically, filed a complaint against Milei on October 11 for "public intimidation" with the aim of "arousing public fear." The complaint also concerns Marra. An investigation has been opened.
The previous day, four Argentinian banking associations had condemned Milei's remarks, without naming him. "A strong democracy needs solid institutions and mature, responsible political leaders," the statement said. "Candidates must avoid making unfounded statements that cause uncertainty among the population and volatility in financial variables," continued the text from the banking entities.
Milei counter-attacked at a press conference on October 11. He refused to accept any responsibility for the peso's devaluation. "Am I responsible for the budget deficit? For the money issue? For the debt?" he said, listing various phenomena involved in the devaluation and inflation. The latter stands at 138% year-on-year, one of the highest rates in the world.
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