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Source: TH

 Context: Argentina’s new president Javier Milei plans to replace Argentina’s currency with the dollar to address economic challenges.

Dollarization is seen as a potential solution to hyperinflation, breaking the link between rising prices and increasing money supply. Ecuador’s successful experience with dollarization led to notable improvements in economic growth, poverty reduction, and inflation control post-dollarization. However, dollarization is not a universal remedy. Concerns have been raised about Milei’s proposals to slash government spending and abolish the Central Bank.

Argentina is a country in the southern half of South America. It is the second-largest country in South America after Brazil, the fourth-largest country in the Americas, and the eighth-largest country in the world. Argentina faces a severe economic crisis marked by hyperinflation, widespread poverty, and a depreciating currency (peso).


Previously, India has been in talks for finalizing agreements for the acquisition of five lithium blocks in Argentina through the State-owned joint venture, KABIL.

The Andes Mountains, which run through both Argentina and Chile, are known for hosting lithium-rich brine deposits. The region’s unique geological conditions make it conducive to the formation and concentration of lithium resources.