This is basically equivalent to blowing up the country’s central bank and fulfilling its promise!
background:
Argentina has maintained extremely high inflation for a long time, and there is no sign of contraction. The European Union and the United States have been examples of high inflation in the past few years, but at most it is around 10%. Since December 2017, Argentina's inflation has never been lower than 24%. If the time is extended, the currency depreciation cycle will be longer. The most important thing is not history, but the direction. According to the latest data in September, its inflation has reached 138.3%, and it is still expanding. Although it has not reached the general definition of hyperinflation of 50% inflation per month, inflation is not a linear increase. Once the residents of the country no longer believe in the purchasing power of currency, everyone is more willing to spend the money as soon as possible and try not to accept credit currency as much as possible, or even return to barter. No one wants the currency, it is just a pile of beautifully printed paper, which is meaningless. Hyperinflation is often followed by an exponential increase in inflation and an order of magnitude change.
Domestically, the currency has depreciated. Looking at the exchange rate, not to mention the distant past, the exchange rate of the U.S. dollar against the Argentine peso was around 8 in 2014, while the latest data shows it has reached 356, a depreciation of more than 40 times. The black market is said to be even higher. Both the rich and the poor in the country do not believe in the purchasing power of their own currency, and they are trying to exchange it for a global hard currency like the U.S. dollar to reduce losses. From the perspective of personal interests, this is an inevitable trend, but from a populist perspective, of course many people will come to different conclusions. It depends on how you look at this issue. If exchanging foreign currency is disloyalty, it is also difficult to evaluate modern economic globalization.
Influence:
If inflation is maintained at double digits for a long time, readers will probably accept it. But what if it is at triple digits? This is actually because the economic foundation determines many things. When residents are in a very high pain index for a long time, they will seek change, and the way to change is to bet on some seemingly crazy political propositions, including crazy speeches such as blowing up the central bank.
Why are people willing to pay for it? Here we need to talk about the role of the central bank in the modern financial system. After the collapse of the Bretton Woods system, the world basically entered the era of a pure credit system. No one promised to link their currency to gold. Compared with the increasing commodity output, gold reserves are just a drop in the bucket and can no longer serve as an anchor. Then the money supply is basically very dependent on a country's monetary policy and fiscal policy, which are often the same thing, such as deficit monetization. When an economy is overly corrupt and profligate, it often accumulates huge government debts. At this time, the government debt can only be maintained by continuing to print money with the left hand and spend it with the right hand. The central bank has completely become a tool for taxation rather than maintaining the normal operation of the financial system. The result is that the more money is supplied, the more internal productivity stagnates, and the seigniorage continues to dilute the purchasing power of all residents, falling into a vicious cycle.
The most core function of a central bank is to stabilize the purchasing power of its currency, followed by economic growth, sound finance, employment, exchange rates, etc. If a country's central bank cannot perform any of these functions and merely becomes a tool for levying seigniorage, then the significance of its existence is questionable. This is probably an important reason why its residents still make choices when they hear political propositions that seem so shocking to us.
Right and wrong are matters of opinion, and the normal operation of the economy depends on each function playing its role well. If a stable currency, sound finance and an efficient government are not achieved, residents may dare to try some paths that sound scary, and it is not enough to just choose full dollarization. But do residents have any other choice?