Crisis-stricken Argentina must dollarize and get rid of the central bank, veteran economist says

Argentina is in the grip of a profound economic crisis, and one veteran economist believes part of the solution is for President Javier Milei to deliver on his campaign promise to dollarize the economy and abolish the central bank.

Latin America's third-largest economy is currently struggling to cope with the world's fastest rising prices, which is hammering the purchasing power of Argentinians.

Data published Tuesday by the country's statistical office showed that Argentina's 12-month inflation rate through February rose to 276.2%, reaffirming Argentina's position as having the world's worst inflation.

Argentina's government on Monday launched a massive peso debt swap in a bid to help stabilize the crisis-stricken economy and potentially pave the way for Milei to lift currency controls.

Steve Hanke, professor of applied economics at Johns Hopkins University, described the move as a "kick the can down the road type of operation."

"They don't need to buy any time, if they dollarized the economy and got rid of the central bank – something that Milei promised during his campaign, the thing would be fixed. And it is feasible to do that, and I think it is totally desirable," Hanke told CNBC's "Squawk Box Asia" on Thursday.

Hanke said that in 1999 he had drafted a law at the request of former President Carlos Menem that would have dollarized Argentina's economy. The economist has previously said he'd been in close contact with Milei's technical team and described himself as an "informal advisor" on issues such as dollarization.

"We wouldn't be talking about this, and they wouldn't have defaulted over and over again if they would have dollarized way back in 1999. But at any rate, it looks like Milei has put the dollarization thing on