MILEI’S PLAN OF DOLLARIZATION IN ARGENTINA: REALITY OR CHALLENGE?

On November 19th, 2023, the right-wing candidate Javier Milei beat then-Minister of Economy and Peronist Sergio Massa in a tight election in Argentina with 55% of votes, becoming the most-voted President in Argentina’s history. Controversial initiatives have marked his candidacy; the most disruptive is dollarizing the South American nation. The proposal was put on the table due to inflation levels higher than 140%, and the rate is expected to keep going up. Some experts affirm that replacing the Argentinean Peso with US Dollars would control the rise of prices but they warn about several risks.   Dollarization concept As its name suggests, dollarization is the process in which a country decides to give up its own currency and replace it with a stronger one, in this case, the American dollar. There are two types of dollarization: partial (currency substation) and full (currency substitution); the first one consists of a country using a foreign currency in lieu or addit...