President Javier Milei said Argentina is “very close” to being able to dollarize its economy, a flagship proposal of the libertarian economist’s campaign that some observers said had seemingly been put on ice.

“We are very close to being able to dollarize,” Milei said in an interview with Colombian journalist Patricia Jainot uploaded on Thursday to her You Tube account. The President stated that, under his administration, the Central Bank bought “a little more than US$5 billion,“ adding that the country’s monetary base is US$7.5 billion.

“If we could clear all the interest-bearing liabilities, Argentina would be in a position to dollarize [its economy] with very little money. That way, we would exterminate inflation,” the president said. 

The president added that dollarization had been delayed due to the “macroeconomic disaster” that his government received from the previous administration. He said that his government is “strongly committed” to reaching a zero deficit, decreasing the inflation rate — which reached a record-high 25.5% in December —, cleaning the Central Bank’s balance sheet, and lifting exchange restrictions.

“The discussion about [closing] the Central Bank is still ongoing,” he said.

He described his model as a “currency competition” in which individuals choose what currency they use. Milei also criticized a letter published last September in which 170 national and foreign economists called dollarization a “mirage.”

“Many of them are largely responsible for Argentina’s decline and the great monetary disasters it suffered,” he said, adding that the criticism they have received is “solely a defense of the robbery politicians have perpetrated on Argentines.”

The market has not yet reacted to Milei’s statements, a source close to the matter told the Herald. They said that the president’s statement was probably intended to send a political message to Congress amid the debate on the reform package contained in the mega-decree and omnibus bill. The source considered that dollarizing the economy would negatively impact provinces whose lawmakers oppose the omnibus bill and that the message was aimed at exerting pressure on the governors.

“There is not a technical justification,” the source said. “To dollarize, you need dollars — and [the government] doesn’t have them.”

The Herald reached out to a Economy Ministry spokesperson for comment but did not receive an immediate response.