Argentina heads to the polls today and the existance of the currency is at stake

Latin America’s second largest economy heads to the polls today in a major election featuring an outsider taking on Peronist economy minister Sergio Massa.

Javier Milei has made major waves in saying he would abolish the central bank and dollarize the economy. A similar experiment yielded good results in the 1990s until it came crashing down in a crushing recession and default in 2021. Since then, though, it’s been a series of missteps in Argentina and people are hungry for change. The chart of USD/ARS highlight how the currency has imploded into an inflationary spiral.

Milei is an enigmatic leader who calls himself a libertarian and is unabashedly capitalist in his opposition to the socialist Massa.

The first round of polls also showed Milei ahead but Massa ultimately won 37-30%, forcing a runoff.

The election could also have consequences for the broader region, with Milei saying he would pull out of the Mercosur trade bloc. He also promised to freeze relations with China, among a long list of rock-the-boat social and economic policies. It’s not clear how many of these policies he could actually implement as the local system of government is modelled after the three branches of the US political system.