WSJ: Milei Should Revive Dollarization in Argentina
The paper described the timing as favorable for Milei—who campaigned on promises to “shut down the Central Bank” and dollarize the economy.
Quick overview
- Argentine President Javier Milei met with U.S. President Donald Trump in New York after the U.S. Treasury announced financial assistance for Argentina.
- The Wall Street Journal suggested that Milei should consider dollarizing Argentina's economy to gain U.S. support and reduce default risk.
- Former advisor Emilio Ocampo renewed calls for dollarization, arguing that fiscal credibility is more important than reserve amounts for a successful transition.
- The WSJ noted Milei's fiscal and regulatory advances, highlighting a balanced budget and significant economic growth over the past year.
The Argentine President met with his U.S. counterpart in New York following the announcement of financial assistance from the U.S. Treasury.
The Wall Street Journal suggested that President Javier Milei should revive the idea of dollarizing Argentina’s economy, ahead of his Tuesday meeting in New York with U.S. President Donald Trump.
In an editorial on Argentina, the financial daily argued that if Milei seeks U.S. support to reduce default risk and maintain access to capital markets, he “could start by putting dollarization back on the table.” The paper described the timing as “favorable” for Milei—who campaigned on promises to “shut down the Central Bank” and dollarize the economy—to receive a push from the Trump administration toward adopting the U.S. dollar as legal tender.
According to the WSJ, “Argentines have billions of dollars stashed away in mattresses and coffee cans,” and a “credible plan from Milei to make the dollar the national currency” would allow those funds to “be put to work in Argentina’s economy.”
Former advisor renews push for dollarization
In recent hours, Emilio Ocampo—Milei’s former advisor and his initial nominee to lead the Central Bank—renewed his push for dollarization following the announcement by U.S. Treasury Secretary Scott Bessent of a financial aid package for Argentina. Ocampo argued this not only gives the government breathing room ahead of October’s legislative elections, but also reopens the door to moving forward with dollarization.
According to Ocampo, the belief that Argentina needs enough dollars to fully back its M3 (or at least M2) money supply in order to dollarize is mistaken. He recalled that “as Nobel laureate Thomas Sargent pointed out more than 40 years ago, the convertibility of a paper currency issued by a state depends more on fiscal credibility than on the amount of reserves in the central bank.”
The American daily also highlighted Milei’s “significant fiscal and regulatory advances,” noting that “he balanced the budget and freed thousands of entrepreneurs from a web of bureaucratic hurdles.” It added that in the 12 months through June, “the economy expanded by more than 6%.”
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