February 21st, 2025
1. Javier Milei, amidst a scandal for a fraudulent cryptocurrency
On Friday night, President Javier Milei promoted through his X account a cryptocurrency called $LIBRA, which was part of a project called Viva La Libertad Project, supposedly aimed at funding Argentine startups and SMEs. However, hours after his announcement, and following a strong increase in the currency’s value, a rug pull was executed, crashing its value back to $0. Those who carried out the movement were reportedly a few users who held most of the tokens and withdrew a total of 90 million dollars. At midnight, and after rumors grew about a scam or hacking of the president’s account, Milei announced on the same social network that he decided to delete his post to avoid further publicity, accusing the opposition of trying to take advantage of the situation. The incident had widespread repercussions: Unión por la Patria filed a request for political trial; the company responsible for issuing the crypto denied fraud and leaked conversations revealed alleged bribes to Karina Milei; complaints were filed locally and presentations were made to the SEC and FBI. To calm the situation, the president gave a television interview on Monday night on TN channel, where he defended himself: “Everyone who got in there, who did so voluntarily, knew very well what they were getting into, they are volatility operators. They knew very well the risk they were taking. If you go to the casino and lose money, it’s your problem. It’s a problem between private parties. The State has no role. I didn’t promote it, I shared it.” However, hours after the interview was broadcast on television, the channel uploaded it to YouTube, showing an unaired portion where the main presidential advisor, Santiago Caputo, interrupts the interview following a response from Milei that he considered negative for the legal strategy. In recent hours, pressure has grown on Karina Milei, with multiple accusations of requesting money as a precondition for meetings with the president. Finally, on Thursday, the Government created an Investigation Unit within the Anti-Corruption Office of the Ministry of Justice.
2. Crypto scandal affects several macroeconomic indicators
The economic outlook appears complicated following the $LIBRA cryptocurrency scandal. The current situation shows concerning signals across several key economic fronts. The Central Bank is losing reserves significantly, despite dollar purchases in the market: gross reserves are at their second-lowest level since October, standing at 28,361 million dollars. The MEP dollar climbed 2.2% to reach $1210, while the informal exchange rate advanced 1.2% and the blue dollar quote reached $1235. The cash with liquidation rate, with Wall Street closed, advanced 1.1% and settled at $1210. The country risk exceeded 700 basis points, which could complicate debt refinancing possibilities. The situation is aggravated by the government’s need to strongly intervene in the financial dollar market to maintain the exchange rate gap under control, which is generating additional pressure on reserves. JP Morgan estimates that the BCRA has allocated around 21,000 million dollars to these interventions. Additionally, the Buenos Aires Stock Exchange fell 1.3%. In the main panel, composed of companies with the highest trading volume, the most notable declines were observed in shares of Edenor (-3.6%), BBVA (-3.2%), and Banco Supervielle (-2.8%).
3. Javier Milei travels to the United States
President Javier Milei is making his ninth trip to the United States since taking office. The president is accompanied by Foreign Minister Gerardo Werthein; his sister, Karina Milei; Minister of Economy, Luis Caputo; and presidential spokesman Manuel Adorni. The president met with Elon Musk on Thursday, the same day of his arrival, who now heads the White House’s Government Efficiency Department. He will also meet with the International Monetary Fund (IMF) Director, Kristalina Georgieva. Additionally, the President will deliver a speech titled “The Argentine Economic Model” at the Inter-American Development Bank (IDB) and will meet with World Bank President Ajay Banga. On Saturday, he will attend the Conservative Political Action Conference (CPAC), but no bilateral meeting between Milei and Donald Trump is expected. The delegation is scheduled to return to Buenos Aires on Saturday night.
El País: Milei viaja a Estados Unidos en medio de la crisis por la criptomoneda $Libra
4. Trade balance recorded an 82% year-on-year decline
According to INDEC’s estimated figures, in January 2025 Argentina’s trade balance recorded a surplus of US$ 142 million. This represents an 82% decrease compared to the same month in 2024. This decline was mainly due to a sharp increase in imports (24.6%), which exceeded export growth (9.1%). Despite a 12.5% increase in export volumes, prices fell by 2.9%, while imports grew by 37% in volume, especially in goods purchased through couriers. This surplus is the lowest since December 2023, and the trend indicates growing pressure on foreign trade, reflecting higher domestic demand and falling international prices.
INDEC: Intercambio comercial argentino
5. The Senates approves the suspension of the PASO elections for 2025
After the approval in the Honorable Chamber of Deputies of the Nation, the Senate concluded the vote and approved the suspension of the Primary, Open, Simultaneous and Mandatory Elections for 2025. This means that Argentines will vote in October only to elect deputies and senators. The law was supported by La Libertad Avanza, PRO, some of the UCR and part of Unión por la Patria. There were 43 votes in favor, 20 against, and 6 abstentions. The government argues that the PASO are unnecessary and costly, while the opposition considers that eliminating them harms the internal democracy of the parties. The measure applies only this year, and in the 2027 presidential elections they could be reintroduced.
Clarín: Suspenden las PASO con el voto del oficialismo, el PRO, un sector de la UCR y los K