Rapid inflation, weak growth, and defaults plagued Argentina for years.
But it’s new president, Mauricio Macri, surprised more than one by the dazzling pace of the changes he undertook in Argentina, a country not used to economic reforms.
Macri has vowed to restart Argentina’s economy, if elected. And since he took office on December 10, he’s been going all the way.
In the first seven days of his presidency, here is what Macri did:
Related: Why Wall Street Cares So Much About Argentina’s Elections
1. Lifting of exchange controls
The biggest change came on Thursday when the administration lifted exchange controls and let the peso float freely.
“This is how a normal economy works in any part of the world,” the country’s new finance minister, Alfonso Prat-Gay, told reporters on Wednesday.
The previous president, Cristina Fernandez de Kirchner, had placed controls on the peso for four years to curb inflation. Despite this, inflation has risen and this year alone has increased by around 25%.
A predominantly fixed exchange rate has resulted in a deep overvaluation of the peso. Until Thursday, the peso was worth about 9.8 pesos to the dollar.
After checks were lifted on Thursday, the peso fell 26% to 14.5 pesos to the dollar.
Moving involves risks. This can cause the peso to lose too much value and trigger even more inflation.
However, currency manipulation has discouraged foreigners from investing in Argentina. And the country is in dire need of foreign liquidity. Last month, American Airlines announced that it would not accept pesos, in part because of the overvaluation of the peso.
Related: Argentina Lifts Currency Controls, Peso Reservoirs
2. New president of the central bank
Macri’s party has appointed Federico Sturzenegger, a US-trained economist, to head the central bank.
Sturzenegger must encourage foreign investors to return. Quick.
Argentina’s central bank has seen its foreign exchange reserves collapse in recent years due to debt payments and inflation. Reserves peaked at over $ 50 billion in 2011, but have since fallen to $ 24 billion, according to the central bank.
3. Tax cuts
Macri cut personal income taxes and lifted export taxes to help boost trade and spending.
Kirchner had implemented the export tax and outraged farmers in Argentina. The country’s economy is fueled by commodities like petroleum and soybeans. Exports are crucial for its economic growth.
Farmers, mostly grain suppliers, have now agreed to sell the grain reserves they have accumulated while waiting for the currency to devalue.
Related: American Airlines Won’t Accept Argentine Peso
4. Foreign money cushion
Macri and a group of international banks have already agreed on a $ 5 billion loan that will boost reserves while the government restores investor confidence.
Prat-Gay, the finance minister, said he expects cash flow in Argentina to be between $ 15 billion and $ 25 billion over the next month, which will help increase the reserves of the central bank.
5. The new numbers dude
Hardly anyone believed Kirchner’s figures for Argentina’s economy. The IMF demanded earlier this year that the Kirchner regime release more legitimate data.
Macri therefore recruited a new team of economists to restore credibility to the Argentinian statistics agency, INDEC.
Legitimate data should also attract investors to Argentina.
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6. Two new Supreme Court justices
Macri is expected to bring in a lot more reforms. If challenged, he must ensure that the reforms have a chance in court. Macri issued a decree to appoint two new Supreme Court justices to the vacant seats. These appointments should help his agenda.
7. End the fight with the vultures of Wall Street
Argentina needs liquidity and the biggest hurdle is a group of hedge funds in New York that hold Argentina’s defaulted debt. Kirchner refused to pay them, and Argentina was barred from accessing foreign funding until it footed the bill.
Macri’s team says they will negotiate with the creditors, led by billionaire Paul Singer. But any agreement must go through Congress, where his party is in the minority.
Major challenges lie ahead for Macri and Argentina, but experts agree he has taken the right steps so far.
“It’s still the beginning, but Mr. Macri has started his tenure well,” said Neil Shearing, chief emerging markets economist at Capital Economics, a research firm.
CNNMoney (New York) First published on December 18, 2015: 10:42 a.m. ET