The anarcho-capitalist president had wanted to scrap the national coin for US dollars

Argentinian President Javier Milei’s “shock therapy” has managed to bolster the country’s currency in a key foreign-exchange market to levels unmatched across the globe, according to Bloomberg.

The “parallel peso” trading on the blue-chip swap exchange has risen 25% against the US dollar over the past three months, more than any of the 148 other currencies tracked.

The outlet called this a “shocking statistic” given that the peso reached the rate of almost 300% annual inflation when Milei took power last December. Since then, the self-described anarcho-capitalist has managed to slash government spending and “choke off” demand for everything – including dollars – in order to tame runaway inflation.

“The great novelty in Argentina is that the person in charge is not worried about paying the political cost that comes with austerity – that’s unusual,” the outlet quoted Javier Casabal, head of research at AdCap Grupo Financiero in Buenos Aires. 

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Milei’s budget cuts may not be “the largest in the history of humankind,” as he described them, but have been larger than about 90% of austerity programs carried around the world in the last several decades.

The president has slashed almost 4% of Argentina’s GDP. On paper, this has caused a deep recession and caused layoffs. It has also propelled the peso to steadily rise since January. The standard that gauges Argentina’s actual purchasing power shows it up by 72%, for example.

This has enabled Argentina’s central bank to buy dollars and replenish the previously depleted hard-currency reserves. It is also no longer financing government spending by printing money and has lowered interest rates, for the fourth time since Milei took office.

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“Under this government, economic policy is starting to become rational,” said Carlos Perez, director of the consulting firm Fundacion Capital.

Argentines also appear to have more confidence in their currency, which has lowered the demand for dollars. Perez noted that many people who had bought up the US currency as an inflation hedge are now selling it back, to get the pesos they need for everyday business.

Bloomberg has described the peso rally as “an ironic twist” for Milei, given that he called the currency “excrement” on the campaign trail and called for scrapping it entirely in favor of the dollar.