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In much of this Argentina could profitably copy Peru. Two things are at the root of Argentines’ longstanding mistrust of the peso. One is persistent fiscal deficits that governments have financed by forcing the central bank to print money. Mr Milei is stopping that. The second is protectionism. Even with a bumper agricultural harvest in 2022, Argentina’s exports that year were only 14% of gdp, compared with 26% in Peru. And Argentina’s nationalist economic policies deterred foreign investment. The result is that its central bank has exhausted its international reserves.

Mr Milei’s proposal to impose dollarisation and shut the central bank attacks the symptom rather than the cause. An earlier Argentine president, Carlos Menem, imposed a kind of soft dollarisation in the 1990s, fixing the peso by law at par to the greenback. But Mr Menem was fiscally lax and Argentina’s economy differs too much from that of the United States to form what economists call an optimal currency area. Over time the peso became overvalued; a successor government had to impose wrenching deflation, which could not prevent a financial collapse in 2001-02.

Since taking office Mr Milei has said little about dollarisation. He has shown willingness to rule by decree, but has so far lacked the political skill to pass reforms in Congress. He was in Israel when the omnibus bill was withdrawn. Since returning to Argentina he has made headlines for picking spats with a pop star and calling Congress a “den of rats”. Such belligerence will make it harder for him to succeed.

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