Argentina's populist presidential candidate Javier Milei faces criticism as the peso takes a dive

BUENOS AIRES, Argentina (AP) — Argentina’s firebrand populist presidential candidate Javier Milei, the front-runner to win the election later this month, is coming under fire from his rivals who blame him for a sharp depreciation of the local currency in the parallel market.

Milei has continued to tout his controversial plan for dollarization of the South American country’s economy. With a little less than two weeks to go before the Oct. 22 presidential election, the Argentine peso has sharply depreciated over the past week.

The so-called blue rate, as the informal exchange rate is known, closed at around 1,025 pesos to the U.S. dollar Tuesday, a sharp increase from 880 pesos on Friday. The rate was at 605 pesos per dollar before the upstart Milei rocked Argentina’s political landscape by unexpectedly emerging as the top vote-getter in the country’s national primaries on Aug. 13.

Stringent capital controls mean that access to the official foreign exchange market, which currently prices a dollar at 367 pesos, is extremely limited, so parallel rates have flourished.

Milei, an anti-establishment candidate who admires former U.S. President Donald Trump, has said he wants to replace the peso with the dollar and says Argentina’s Central Bank should be abolished.

The peso had already been steadily depreciating for months, but took a sharp downturn Monday after Milei, in a radio interview, recommended that Argentines not renew fixed rate deposits, saying the “peso is the currency issued by the Argentine politician, and therefore it is not worth crap.”

In recent days, Milei has suggested that the sharp depreciation of the peso could be convenient for his eventual presidency, saying that “the higher the price of the dollar, the easier it is to dollarize.”

The candidate for Buenos Aires mayor of Milei’s self-described libertarian party also called on citizens to drop the peso.

“Today more than ever: Don’t save in pesos,” Ramiro Marra wrote on social media Tuesday.

Milei’s opponents in the presidential race sharply criticized his words, saying he’s fomenting a run on the peso.

Economy Minister Sergio Massa, the presidential candidate for the governing Union for the Homeland coalition, said that some candidates are “capable of setting fire to a house for a vote.”

Patricia Bullrich, the candidate of the main opposition coalition, United for Change, said Tuesday that “between Massa, the arsonist who is leading us into hyperinflation, and Milei’s irresponsibility, which encourages the currency run, there are Argentines distressed about the present and the future.”

The depreciation of the peso will accelerate already red-hot inflation that was at an annual rate of 124% in August.

Banking associations published a news release calling on candidates to “show responsibility in their campaigns and public statements.” Without ever naming Milei, the associations wrote that “recommending not to renew deposits doesn’t do anything other than generate concern in a sector of the population.”

Milei, who has received support by characterizing himself as a political outsider who will battle the “political caste,” pushed back against the criticism, saying there are some who are “trying to gain political advantage from the economic collapse by inventing responsibilities.”

“If you want to find those responsible, look in the mirror,” Milei, a self-described “anarcho capitalist,” wrote on social media.