Argentina's Economy Minister, Luis Caputo, declared an unprecedented step to devalue the peso by more than 50%, aiming to rescue the country's struggling economy. This decision, changing the dollar conversion rate to 800 pesos per dollar from 365, comes early in President Javier Milei's tenure.

Milei, who campaigned on eliminating the peso and adopting the dollar, aims to rejuvenate the economy. The peso, artificially supported for years, plummeted around 52% against the US dollar this year due to strict capital controls.

The devaluation aims to tackle hyperinflation caused by excessive peso printing by Argentina's central bank. To stabilize the situation, the bank raised its benchmark interest rate to a staggering 133% in October.

Caputo outlined various measures, including slashing new public works, non-renewal of year-old labor contracts, and reducing energy and transportation subsidies. Acknowledging the initial drawbacks, Caputo emphasized that these actions are necessary to tackle inflation.

Following the announcement, the International Monetary Fund (IMF) expressed support for Argentina's initiatives. IMF's director of communications, Julie Kozack, commended these bold steps, emphasizing their potential to strengthen public finances while safeguarding the vulnerable.