HEADLINE: Argentina's Fear of Dollarization and the Wobbly Peso GUEST NAME: Mary Anastasia O'Grady SUMMARY: John Batchelor speaks with Mary Anastasia O'Grady about the delay in Argentina's dollarization. Dollarization would bring down interest rates, end

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John Batchelor

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🗓️ 9 October 2025

⏱️ 3 minutes

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Summary

HEADLINE: Argentina's Fear of Dollarization and the Wobbly Peso GUEST NAME: Mary Anastasia O'GradySUMMARY: John Batchelor speaks with Mary Anastasia O'Grady about the delay in Argentina's dollarization. Dollarization would bring down interest rates, end inflation, and attract capital. However, President Milei's team feared the large devaluation that would occur when letting the peso float to find its true market rate before dollarizing, worrying this would damage their public standing.

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0:00.0	This is John Batchelor, conversation with colleague Mary Anastacio Grady of the Wall Street Journal editorial page about the trouble in Argentina and dollarization.
0:10.3	The fear in Argentina of dollarization.
0:14.2	Who fears it?
0:15.8	Mary points to the government, Javier Malay, fears dollarization.
0:20.1	Why?
0:23.5	Mary explains. Mary explains that the waiting game has gone on too long. The peso is now wobbly. Dollarization. Argentina. When?
0:32.0	Promised in the campaign, but when? More of this tonight. Well, let's see, there's a lot to unpack there. It would help
0:42.0	him, I think, because if you dollarize, you would immediately bring down interest rates, you would
0:47.2	get rid of inflation, you would attract capital from abroad, because people don't want to put
0:52.9	dollars into Argentina by buying pesos
0:57.1	and then having the peso be devalued. And they also have the concern of capital controls.
1:03.7	You know, if they put their money in and they can't get it back out, they don't like that either.
1:07.2	So all of those things would be addressed if they dollarized. Why hasn't he done it? Well, one reason is because when he came into office, the Kishners who were in, well, it wasn't, it was Alberto Fernandez, but it was the Kishner wing of the Parenthood's party, had pegged the peso at 400 to the dollar. That was way overvalued.
1:28.5	So he moved it to $800, which was more reasonable, but it still was overvalued.
1:34.8	And in order to dollarize, you have to find the rate that is really the true market rate.
1:41.5	And I think that people in Malay's team were very much afraid of
1:46.7	what I would call floating the peso or letting it go to the market rate. You have to let it go to
1:51.8	the market rate, and that's the rate at which you dollarized. So they were afraid that if they
1:56.6	took off the peg and they let it float, they would have a very large devaluation.
2:03.4	And they didn't want to do that when they had just taken office because they thought that
2:08.3	would damage their credentials among the people who support them.
2:13.6	So they decided to try to just gradually bring down the value of the peso by, you know,
	...

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