Panic! Argentina Devalues Peso, Raises Interest Rates 118%

<p>&nbsp;In a drastic move on Monday, Argentina's government devalued its currency, the peso, by almost 18% and also raised interest rates higher.</p><p><br /></p><p>The move was taken as a government effort to calm the market following the surprise victory of right-wing libertarian Javier Milei as the final candidate for the October presidential election.</p><p><br /></p><p>Milei has previously expressed his desire to replace the peso with the dollar, and said Argentina's Central Bank should be abolished.</p><p><br /></p><p>Following the victory, the Argentine government continued to fix the value of the local currency at 350 pesos to the dollar until the October elections.</p><p><br /></p><p><br /></p><p>Following that, the central bank's main interest rate was also raised to 118% from 97% previously.</p><p><br /></p><p>It is well known that Latin America's third largest economy has been mired in a severe economic and financial crisis for years.</p><p><br /></p><p>The country's foreign reserves are rapidly depleting and inflation is predicted at 142.4% for this year.</p><p><br /></p><p>Milei is the most vocal critic of corrupt politics, saying the country's leaders have caused a succession of crises.</p><p><br /></p><p>He believes replacing the peso with the dollar can ease inflation, but many economists warn that it will trigger financial chaos.</p>