MW Here's what Argentina's president Milei's crypto scandal could mean for Argentine stocks
By Frances Yue
Argentine President Javier Milei faces impeachment calls
An exchange-traded fund tracking Argentine stocks declined on Tuesday as the country's president, Javier Milei, faced impeachment calls after promoting a little-known cryptocurrency called libra that soared in value and then plunged. However, the negative impact on Argentine risk assets is likely to be limited to the short term, according to BCA Research.
??The Global X MSCI Argentina exchange-traded fund ARGT, which tracks Argentine stocks, ended 0.6% lower on Tuesday but off session lows at $84.98, according to FactSet.
The ETF has risen 67.6% since Milei took office on Dec. 10, 2023. The S&P 500 SPX has gained 32.8% during the same period.
Milei late on Friday endorsed libra, a meme-inspired cryptocurrency, in a post on X, which led to a brief rally for the coin. "This private project will be dedicated to encourage the growth of Argentina's economy, funding small Argentine companies and ventures," he wrote. A few hours later, however, Milei deleted the post, and the coin's price plunged.
A judge in Argentina was selected on Monday to investigate allegations of fraud against Milei, who has denied the allegations.
Milei's promotion of the libra coin could hurt the government's popularity at the margin, Juan Egaña, a strategist for emerging markets at BCA Research, wrote in emailed comments to MarketWatch. However, it is unlikely to threaten Milei's hold on the presidency, he noted.
The opposition party in Argentina doesn't have a two-thirds majority in the country's legislature, which is required to impeach the president, Egaña added.
The scandal "will undoubtedly erode trust in the government, which has remained high, but isn't enough to turn a large majority of Congress against Milei and derail his economic agenda or remove him from the presidency. Thereby, the long-term impact on Argentine stocks will be minimal," Egaña wrote.
BCA's structural outlook for Argentine risk assets remains bullish, Egaña noted.
Milei's support for libra came after U.S. President Donald Trump issued his own namesake meme coin in January, days before his inauguration. Milei, a libertarian economist, has often been compared with Trump due to their shared ideologies.
-Frances Yue
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February 18, 2025 22:22 ET (03:22 GMT)
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