Georgetown Americas Institute

Between the end of June and the first half of July 2024, the Argentine government launched Phase Two of its economic stabilization plan by doubling with a severe monetary tightening to lower the price of the parallel U.S. dollar and reduce the gap between the Argentine peso and the official U.S. dollar, bring forward the removal of exchange rate controls, and accelerate the decline of inflation. What is the future of the stabilization plan if the government succeeds in quickly achieving its proposed objectives, and what options are available if it does not?

With the launch of Phase Two of the stabilization plan, the government displays consistency with the stabilization strategy it has pursued since the beginning of 2024, relying on the fiscal surplus and strong monetary tightening to steer it to success. The goal: to persuade the market that there will be no step devaluation of the official dollar and, if successful, trigger the sale of dollars, convergence of the parallel dollar with the official dollar (from the parallel towards the official), unification of the foreign exchange market and lifting of exchange rate controls, capital inflows for strategic investments, an increase in international reserves, reduction of country risk, and the recovery (and remonetization) of the economy.