Argentina President Javier Milei allows provinces to create local currencies

Argentina President Javier Milei has signaled a laissez-faire stance towards provinces launching their own currencies.

This shift in policy was highlighted following a public discourse between President Milei and Ricardo Quintela, governor of La Rioja province. During a Jan. 14 interview with Radio Mitre, President Milei confirmed his decision not to challenge the creation of local currencies by provincial authorities legally.

Quintela emphasized his belief that the market would ultimately determine the viability of these projects. However, Milei cautioned against the potential pitfalls of such endeavors, particularly regarding inflation. He warned that “those who receive payments in quasi-currencies from irresponsible governors will clearly see a loss of their income.”

The governor of La Rioja has been a vocal proponent of introducing a separate currency for his province. This move comes after President Milei’s drastic devaluation of the Argentine peso by 50% since assuming office on Dec. 10.

This decision was part of a broader strategy to tackle Argentina’s soaring inflation, reaching its highest levels in over three decades. Additionally, the new administration has reduced the funds allocated from the federal budget to provinces.

Quintela criticized these measures as “the abandonment by the nation” and cited the urgent need to pay salaries, including those of police officers. Consequently, he has urged the local legislature to establish the legal framework necessary for minting a local currency. This sentiment was echoed by Axel Kicillof, the governor of Buenos Aires province, who also considered issuing a local currency in December 2023.