Argentina's Milei signals 'no room' for FX devaluation
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Argentina's President Javier Milei attends the opening session of the legislative term, at the National Congress, in Buenos Aires, Argentina, March 1, 2025. REUTERS/Matias Baglietto/File Photo
BUENOS AIRES (Reuters) - Argentina's libertarian President Javier Milei said on Thursday that there was "no room" for a sharp devaluation of the local peso, addressing investor fears about a potential weakening of the currency that has driven a renewed flight to dollars.
The country, which is in advanced talks with the International Monetary Fund (IMF) over a potential $20 billion deal, is battling to rebuild depleted reserves and prop up the peso, which is held in check by strict capital controls.
Milei hinted that in the case of an IMF deal the country would have a "mountain of dollars" and few peso, leaving little room for a sharp devaluation of the currency.
"There's no room for raising the exchange rate," Milei told local radio, adding that the timeline for removing capital controls would depend on how quickly the country could receive new funds in an eventual IMF deal.
"You'd have a mountain of dollars for a few pesos, plus no fiscal deficit."
(Reporting by Eliana Raszewski and Lucila Sigal; Writing by Adam Jourdan)
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