Already a subscriber? Make sure to log into your account before viewing this content. You can access your account by hitting the “login” button on the top right corner. Still unable to see the content after signing in? Make sure your card on file is up-to-date.

Argentina’s government has declared a significant devaluation of its currency, the peso, as part of a series of measures to address the nation’s severe economic challenges under its new president.

The announcement on Tuesday by Economy Minister Luis Caputo indicated the peso’s value would drop from 400 to over 800 against the US dollar. This devaluation is a part of a broader economic strategy by President Javier Milei’s administration, which also includes cuts in subsidies, halting public works tenders, and reducing government ministries.

To mitigate the impact of these measures, the government intends to double social spending for the poorest segments of society. Caputo acknowledged the immediate hardships, stating, “For a few months, we’re going to be worse than before,” and warned of the risk of hyperinflation without these measures.

While the International Monetary Fund (IMF), to which Argentina owes $45 billion, praised the plan, it has drawn intense criticism from progressive circles. Left-wing activist Juan Grabois condemned the measures, emphasizing their impact on various sectors: “Your salary in the private sector, in the public sector, in the popular, social and solidarity economy, in the cooperative or informal sector, for retirees and pensioners, will get you half in the supermarket.”

President Milei, inaugurated on Sunday, advocates for stringent cutbacks, believing it essential for Argentina’s prosperity. He has pledged to primarily target the state sector with these adjustments, avoiding significant impacts on the private sector.

Despite his approach, Milei has garnered significant public support, though he faces potential resistance from the left-leaning Peronist movement’s lawmakers and unions opposed to wage reductions.