Argentina hasn't adopted the dollar faster because the nation's politicians 'play dirty,' President Milei says
- Argentina's shift to the dollar has been hampered by corrupt politicians, President Milei said.
- Milei's strategy to sell central bank liabilities for dollars could have resulted in impeachment, he told Bloomberg.
Argentina hasn't incorporated the US dollar into its economy any faster because the nation's politicians "play dirty" and could have impeached him, President Milei said.
Speaking to Bloomberg on Friday, Milei pointed to Argentina's dire financial situation, with the nation's central bank swimming in debt as inflation remains near-stratospheric levels. Prices grew at an annualized rate of around 17,000% last December, Milei estimated. He called the central bank he inherited at the start of his presidency practically "bankrupt," and facing a "fiscal, monetary, and currency disaster of extravagant proportions."
Adopting the greenback was key to Milei's plan to turn over Argentina's economy and clean up the central bank's balance sheet. His strategy to sell the central bank's liabilities on the market for dollars would have worked "perfectly," he told Bloomberg, if it weren't for the oppositional political situation in the country.
"It would have been a highly successful approach and we would have been in the position to do that. But given the structure of Argentina's political system, and considering how intellectually dishonest politicians and economists are in Argentina, it's very likely that if we had actually engaged in that sort of transaction … politics probably would have said that was fraud," Milei said. "They probably would have accused us of some monkey, shady business and would have sent us to prison."
Argentina's political and corporate spheres have been marred by corruption for years. Dismantling corruption and reforming the Argentinian economy were key tenets of Milei's presidential campaign, though he warned in his inaugural address that progress would come gradually.
"We did infer that in political terms, politics was going to play dirty, which is what it actually does," he said to Bloomberg. "They would have tried to pursue impeachment, and it would be a different story now."
But Milei hasn't given up on his goal of dollarizing Argentina's economy over the long term. Adoption of the dollar would take monetary control away from Argentina's central bank, an issue Milei described of "moral" importance.
"The ultimate goal of doing away with the central bank still stands," Milei said, pointing to the central bank's long-running habit of issuing more pesos to pay its debts. "To me, stealing is wrong. And what the central bank does when it prints money is actually counterfeit. It's fraud," he added.
Argentinian inflation remains elevated, but prices have started growing slower than expected. Consumer prices grew just 13.2% in February, down from estimates of around 15%, according to analysts polled by Reuters.