World

Argentina’s president-elect announces choice for economy minister

Javier Milei recently held talks with the Biden administration in Washington (AP)
Javier Milei recently held talks with the Biden administration in Washington (AP) Javier Milei recently held talks with the Biden administration in Washington (AP)

Argentina’s president-elect Javier Milei has announced Luis Caputo, a former finance minister and Central Bank chief known as an expert in markets, to lead the economy ministry when the right-wing leader takes office on December 10.

The choice confirms that Mr Milei, a libertarian outsider, is building a more orthodox team to manage Argentina’s economy, which is suffering from red-hot inflation running at an annual rate of 143%.

“Yes, the economy minister is Luis Caputo,” Mr Milei said in a radio interview shortly after landing from a two-day trip to the United States, where he met with officials from the Biden administration.

As the first finance minister in former conservative president Mauricio Macri’s government, Mr Caputo was in charge of a debt restructuring and later became Central Bank chief.

Luis Caputo
Luis Caputo Luis Caputo will be the new economy minister (AP)

Mr Milei has said he wants to get rid of the Central Bank.

Mr Macri’s party backed Mr Milei in the November 19 presidential run-off, and now his allies are jockeying for position inside the president-elect’s cabinet, leading to some tensions with his traditional libertarian allies.

The market has welcomed signs of Mr Milei’s more orthodox choices for key cabinet positions.

Argentine stocks and bonds have increased while the local currency, the peso, has appreciated slightly in financial markets since he won the election.

Mr Milei had previously said he was going to hold off until his inauguration to unveil the post of economy minister, because he feared his choice could be blamed for any economic woes before he even takes office.

Mr Caputo’s naming is no surprise as he was part of the small group of Milei aides who accompanied the president-elect to Washington.

Javier Milei
Javier Milei The more measured move has reassured the markets (AP)

Mr Milei had previously praised Mr Caputo for his market expertise. In a television interview last week he said he believes Mr Caputo could overcome the problem of short-term notes known as “Leliqs” – short-term loans the Central Bank makes to banks as a way to vacuum up excess pesos – and “end controls on the exchange rate”.

The leader in waiting said he considers the Central Bank’s stock of “Leliqs” as one of the first problems he has to solve. He said the notes could spark hyperinflation because they increase the stock of pesos.

“I have to dismantle the ‘Leliqs’ ball to avoid hyperinflation,” Mr Milei said in an interview.

“There is no greater financial expert in Argentina than Luis ‘Toto’ Caputo. He is the ideal person to dismantle this problem.”