What is the secret to the success of the Argentine peso?

Such impressive progress occurred after the new Argentine President Javier Milley, who, by the way, is a pro-Ukrainian politician, came to power.

What is important to understand is that during 2024, the peso strengthened by 44.2% against a basket of trading partner currencies, adjusted for the country's three-digit annual inflation.

Experts point out that this indicator significantly exceeds the 21.2% growth of the Turkish lira, which ranked second in the ranking.

Moreover, it is noted that the increase in the rate set by the government has been replicated in several legal and illegal markets where Argentines buy dollars, as access to the official rate is limited.

The economic situation in Argentina has improved significantly

According to analysts, the average salary of the country's citizens from December 2023 to October 2024 at a parallel exchange rate almost doubled in dollar terms to $990. This happened after 7 years of almost constant devaluation.

Against this backdrop, new risks are emerging. First and foremost, the rapid depreciation of the real in neighboring Brazil and the potential tariff policies of future US President Donald Trump could make Argentina vulnerable to a sudden devaluation.

The situation has already been commented on by Ramiro Blasquez, head of research at investment bank BancTrust.

The Miley program is working, but the strengthening of the peso is the biggest risk going forward… If the peso continues to strengthen, or if a strong external shock occurs, the demand for cheap dollars could increase sharply, increasing the risk of devaluation, the expert warned.