Argentina's President-Elect Javier Milei Announces Luis Caputo as Economy Minister

According to Yahoo News, Argentina's President-elect Javier Milei revealed during a radio interview on Wednesday that Luis Caputo will be appointed as the country's new economy minister. Caputo's primary task will be to rescue Argentina from its severe economic crisis. Milei mentioned that Caputo, along with cabinet chief Nicolas Posse, had stayed in Washington to continue discussions with representatives from the US Treasury and the International Monetary Fund (IMF) regarding an economic plan for Argentina. Caputo's responsibilities will include implementing Milei's strategies to curb the nation's inflation, which currently exceeds 140%. Other aspects of Milei's platform, such as closing the central bank and dollarizing the economy, will be put on hold until public spending can be controlled to balance the budget, a key factor in addressing rampant inflation. The incoming economy minister will face significant challenges, including dismantling a complex system of currency controls and price freezes imposed by the previous government without causing hyperinflation. Caputo will need to lift over a dozen exchange-rate controls to promote exports while protecting the country's nearly depleted international reserves. Additionally, he will have to address the disparity between the official peso rate and the parallel exchange rate, as well as the price controls on more than 1,000 basic goods. Caputo previously served as finance chief during Mauricio Macri's administration, where he negotiated a $16.5 billion deal with holdout bondholders, allowing Argentina to re-enter international capital markets. He also issued a 100-year bond that was later swapped by Alberto Fernandez's government after defaulting in 2020. In 2018, amid a currency crisis, Macri appointed Caputo to head the central bank, but he resigned after only a few months due to tensions with the IMF. On Tuesday, Caputo met with IMF officials, including Deputy First Managing Director Gita Gopinath and Western Hemisphere Director Rodrigo Valdes, in his new capacity.