Argentina's Economy Minister, Luis Caputo, has only been in office three days but has already ordered the central bank to execute a major devaluation of the peso. Overnight, the bank shifted its benchmark exchange rate from USD 1 / ARS 364 to ARS 800, a devaluation of 55%.
It is not yet clear how much subsequent movement of the peso will be allowed, but the ultimate aim is likely to be unification of official and unofficial exchange rates (latest black-market rate is USD 1 / ARS 1055), so that economic imbalances are removed and the black market no longer needs to operate. It is reasonable to expect more devaluations, therefore, although they should be smaller.
With the peso trading at fairer value, the cost of imports is sure to rise, lifting inflation with it. However, Caputo also announced other measures to try to stabilise the crisis-hit economy, with several designed to bring down inflation. Until that happens, though, for expatriate staff in Argentina the positive impact on spending power of the weaker exchange rate will be offset to at least a large degree by soaring annual inflation, which had already reached 161% by end-November.