Javier Milei is standing by closing Argentina’s central bank

Javier Milei is standing by closing Argentina’s central bank, per Bloomberg.


President Javier Milei, lauded for his pragmatic approach since assuming office, is reaffirming one of his most contentious campaign promises: the closure of Argentina's central bank.

In an interview with Radio La Red on Thursday, Milei stated that the 86-year-old institution will be shut down "sooner or later," when asked about his plan to dollarize the economy.

Milei also predicted that the December monthly inflation figure, expected at 4 p.m. local time, would be below 30%, possibly closer to 25%. He sees this as a significant success for his economic team, especially considering earlier expectations that reached as high as 45%.

Despite this, the annual inflation rate is on track to surpass 200%, making Argentina the country with the fastest consumer price gains in Latin America, surpassing socialist-run Venezuela.

Doubts about Milei's commitment to closing the central bank emerged as he toned down his rhetoric after winning the November run-off vote. His decision to part ways with some of his more outspoken advisers in favor of members from former President Mauricio Macri's team suggested a potential moderation of his ambitions.

After assuming power in December, Economy Minister Luis Caputo confirmed that the ideas of dollarization and closing the central bank hadn't been discarded. However, Santiago Bausili, Milei's choice to lead the monetary authority, indicated that the institution wouldn't be shuttered during his tenure.

Currently, only about a dozen countries operate without a central bank, including Panama, Kiribati, Tuvalu, Micronesia, Andorra, Marshall Islands, Monaco, Nauru, and Palau. Most of these countries have small populations, and some are considered tax havens.

During the radio interview, Milei also highlighted that Argentina has received 60 requests for bilateral meetings at the upcoming World Economic Forum in Davos, Switzerland. He expressed confidence in securing the necessary congressional support for the comprehensive reform package he recently presented to lawmakers. Additionally, he praised the swift staff-level agreement reached with the International Monetary Fund on Wednesday, calling it the fastest negotiation in the IMF's history.