Initial split in Argentina as Central Bank chairman candidate resigns

As the dust settles from the presidential elections in Argentina, president-elect Javier Milei is faced with his first problem. Prof. Emilio Ocampo, the proposed Central Bank CEO, has resigned, leading some to speculate that Milei might be rethinking his currency reform, according to the "Financial Times".

Milei recently triumphed in the Argentine elections, with a campaign that hinged on a revolutionary approach to the national economy. He proposed that the country should be dollarized — in simpler terms, Argentina would abandon its own peso in favor of the dollar to combat over 100% inflation.

Reports now indicate that the president-elect may be slowing down on this commitment. This speculation was fueled by the "Financial Times" report on Friday.

The British publication highlights that Prof. Emilio Ocampo has resigned from taking charge of the Central Bank. Ocampo, an economic historian and former investment banker, was a significant member of Javier Milei's team. He strongly supported the idea of dollarization and penned a detailed document on the matter that played a crucial role during the election campaign.

Emilio Ocampo was expected to join the central bank after December 10th when Milei will officially assume his presidential duties. His expected responsibilities were dual-fold; he was tasked with introducing the dollar and shutting down the Central Bank. However, it is now clear that he will not be fulfilling these responsibilities given his resignation.

"The only reason Ocampo was supposed to be in there (the central bank - ed. "FT"), was dollarization. He never intended to go to the central bank to implement someone else's plan with which he does not agree" - stated an anonymous source in the "FT".

Both Emilio Ocampo and Javier Milei's team declined to comment on this development.

Back in October, the politically outspoken Milei expressed that the peso was currently worth "less than excrement." On television, he proposed to "take a chainsaw" through the state to balance public finances and advocated for universal privatization.

Nonetheless, in his most recent interview on Wednesday, he seemed to have softened his stance somewhat. He admitted to liking Emilio Ocampo's plan but stressed that several aspects needed careful consideration before its execution.

"We need to examine whether the current market situation allows for a solution like the one Emilio proposes, and whether he is ready to implement a different plan than the one he originally planned – Javier Milei quoted by "FT".

On Friday afternoon, the president-elect's team reassured the public via Service X (an alternative to Twitter) about their intentions of closing the Central Bank - calling it "a non-negotiable issue", despite circulating rumors. However, they did not address the topic of currency reform.

While Javier Milei has yet to announce a new candidate for chairman, local media hints that it may be Demian Reidel, who previously served as the vice president of the institution during President Mauricio Macri's term.