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Milei picks ex-JPMorgan trader to dollarize Argentina’s economy

The president-elect made the announcement after visiting Washington

Minister Luis Caputo. ©  AP Photo/Victor R. Caivano

Argentina’s president-elect, Javier Milei, announced on Wednesday that he has chosen former Wall Street stock trader Luis Caputo to be the country’s economy minister.

Milei made the announcement on Radio La Red after a two-day trip to Washington in which he met US Treasury and the International Monetary Fund (IMF) officials. 

Caputo, who worked at JPMorgan and Deutsche Bank, ran Argentina’s Finance Ministry and then briefly its central bank from 2017 to 2018. He is known for his close ties with Wall Street and Buenos Aires banking sectors.

Last week, Caputo, whose appointment is yet to be officially confirmed, met local and international bank officials to lay out Milei’s proposed “shock therapy” for Argentina’s beleaguered economy, which includes ditching the peso for the US dollar, erasing the fiscal deficit, and closing the central bank.

Caputo’s economics consultancy firm Anker Latinoamerica earlier this year released a report saying that dollarizing Argentina would be “difficult,” though “not impossible,” and would require “complex legal and financial architecture.”

READ MORE: Chainsaw-wielding Argentine election winner pledges ‘shock therapy’

Many economists in the country have repeatedly warned that dollarization is risky and that the government should prioritize other reforms to fix the economy.

“It’s crucial to solve problems with a lot of expertise, because if we make a mistake we could end up with hyperinflation,” Milei said in the interview, referring to a pile of more than 23.8 trillion pesos ($66.2 billion) of the central bank’s short-term liabilities held by local creditors.

The new economy minister, Caputo, will also be tasked with renegotiating Argentina’s troubled $43 billion loan from the IMF, on which the country has missed almost all of its targets this year.

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