Javier Milei reveals exchange rate for dollarization plan

The libertarian presidential hopeful claims that Argentina will become a 'world power' within 35 years

During a presentation at the Latam Economic Forum in Buenos Aires on Wednesday, Libertarian Javier Milei said that he would dollarize the economy at AR$730 per dollar if elected president.

“I am a liberal; I believe in the price system, so [the dollarization] is going to be done at market price,” he said. “How much is the blue-chip swap rate? AR$730. Today, [the price] would be AR$730.”

Milei, who was the most-voted candidate in the primaries held on August 13, has proposed  abolishing Argentina’s Central Bank, eliminating the Peso, and adopting the US dollar as the country’s legal tender.

In March, consulting firms calculated exchange rates ranging from AR$7,070 to AR$9,944 per US dollar. “Don’t be fooled by these criminals,” Milei said during the forum. 

The far-right candidate accused these firms of drinking “five bottles of vodka” to make their calculations. 

“Wages measured in dollars are going to go up a lot, and that will bring down poverty and destitution,” he said before revealing his ideal schedule for his dollarization program.

“If we manage to dollarize before the [2025] mid-term elections, get ready because we are going to have majorities [in Congress] that are going to put Argentina at the top of economic freedom [indices].” 

“I have no doubt that in 35 years we will be a world power,” he continued.

Earlier today, the International Monetary Fund’s Western Hemisphere Director Rodrigo Valdés said that if it were to happen, dollarization would not replace the need for “a sustainable fiscal policy that leads to debts that are not too high.”

“There is no substitute for fiscal policy,” Valdés told El País. “All countries require a sustainable fiscal policy that leads to having debts that are not too high, and dollarizing or not dollarizing is no substitute for that task.”

On Tuesday, Darío Epstein, one of Milei’s economic advisors, said that “the most important thing” for dollarization is eliminating the fiscal deficit. “If I close the tap of monetary emission and I have dollars but no credit, the deficit will not close,” he said.

Epstein also acknowledged that dollarization can’t happen if a potential government doesn’t strengthen its international reserves.

“Javier (Milei) has a very concrete dollarization proposal — so concrete that we are not going to dollarize if there are no dollars,” he said in an event organized by the newspaper Clarín.

On Wednesday, Milei claimed that “there is no point in having a central bank” even if the vast majority of countries have one. “That’s an ad populum fallacy. Just because others do it doesn’t mean it’s right,” he said.

As is his wont, Milei closed his speech by bellowing “Long live freedom, damn it!,” to a thunderous applause.


All Right Reserved.  Buenos Aires Herald