Milei’s Aura Fades: Argentina’s Search for a New Economic Path

Argentina’s free‑market champion President Javier Milei is seeing his popularity wane as the country looks for an alternative policy route to emerge from crisis.

Milei’s Waning Popularity and Market Reaction

■Approval rating slipped 12%, shedding 5 points over the past two months.

■USD/ARS exchange rate jumped 8% a week after Milei’s statements.

■International hedge funds began offloading $1.2 billion worth of short‑term Argentine bonds.

Argentina’s Credit and IMF Dilemma

■The $45 billion IMF program is deemed misaligned with Milei’s reforms.

■Central bank reserves have fallen to $3 billion, inflating external borrowing costs.

■The 3.5% inflation target clashes with Milei’s liberal agenda as inflation rose to 7.9%.

Investors’ Strategic Moves

■Regional funds rebalanced 15% of their Argentine equity holdings.

■Commodity traders lifted silver and copper prices by 4%, reflecting Argentina’s export reliance on these metals.

■Private equity firms announced a $800 million infrastructure fund to support new projects.

Markets are questioning the sustainability of Milei’s reforms, and the risk‑on/risk‑off dynamics become pronounced as Argentina navigates its new economic direction. Bora Yalın, Lead Researcher, International Capital Flows