Argentina’s president-elect announces his pick for economy minister

BUENOS AIRES, Argentina (AP) — Argentina’s President-elect Javier Milei announced Wednesday he has chosen Luis Caputo, a former finance minister and Central Bank chief known as an expert in markets, to lead the Economy Ministry when the right-wing leader takes office on Dec. 10.

The pick confirms that Milei, a libertarian outsider, is building a more orthodox team to manage Argentina’s economy, which is suffering from red-hot inflation running at an annual rate of 143%.

“Yes, the economy minister is Luis Caputo,” Milei said in a radio interview shortly after landing from a two-day trip to the United States, where he met with officials from the Biden administration.

As the first finance minister in former conservative President Mauricio Macri’s government, Caputo was in charge of a debt restructuring and later became Central Bank chief. Milei has said he wants to get rid of the Central Bank.

Macri’s party backed Milei in the Nov. 19 presidential runoff and now his allies are jockeying for positions inside the president-elect’s Cabinet, leading to some tensions with his traditional libertarian allies.

The market has welcomed signs of Milei’s more orthodox choices for key Cabinet positions. Argentine stocks and bonds have increased while the local currency, the peso, has appreciated slightly in financial markets since he won the election.

Milei had previously said he was going to hold off until his inauguration to unveil the post of economy minister, because he feared his choice could get blamed for any economic woes before he even takes office.

Caputo’s naming is no surprise as he was part of the small group of Milei aides who accompanied the new president-elect to Washington.

Milei had previously praised Caputo for his market expertise. In a television interview last week he said he believes Caputo could overcome the problem of short-term notes known as “Leliqs” — short-term loans the Central Bank makes to banks as a way to vacuum up excess pesos — and “end controls on the exchange rate.”

Milei has said he considers the Central Bank’s stock of “Leliqs” as one of the first problems he has to solve. He says the notes could spark hyperinflation because they increase the stock of pesos.

“I have to dismantle the ‘Leliqs’ ball to avoid hyperinflation,” Milei said in an interview. “There is no greater financial expert in Argentina than Luis ‘Toto’ Caputo. He is the ideal person to dismantle this problem.”