While the Minister of Economy, Luis Caputo, defended the decision of Discontinue the Fiscal Liquidity Letters (Lefis) As a tool to administer bank liquidity, the director of Ecogo, Marina Dal Poggettohe warned that Almost all those funds migrated to lace.
“After disorderly expansion process by the financial program, contraction via lace and changes in the way in which they are computed (from averages to daily), The monetary base was at $ 48 billion, of which $ 23 billion are lace ”, Dal Poggetto detailed, in an article written for the IAE, the Business School of the Universidad Austral.
The economist said that “Before the disarmament of the Lefis, the monetary base was at $ 33.1 billion and lace at $ 9.4 billion ”, So he estimated that “Virtually all the disarmament of the Lefis ended in lace.”
It is to remember that last week Caputo said that Lefis’s disarmament was a measure taken to counteract an “attack” of the opposition to the economic program. He considered that the Lefis were about $ | 6 billion “that overcome every day” that could have caused a collapse with the exchange rate.
Dal Poggetto holds instead that “The decision to disarm the Lefis, announced on June 9 and implemented on July 10, generated a new cimbronazo on domestic interest rates.”
“Eliminating the liquidity instrument of the banks added volatility to a scheme that, in itself, began to operate with real interest rates and coordinated a change in the composition of the treasure debt (by the disarmament of the Lefis), a nEUVA Escalada in interest rates and a dangerous maturity concentration that the economic team (Treasure and BCRA) is still trying to suture with a very different logic from the one that prevailed, ”he warned.
In that sense, he argued that “with the Monetary squeeze of the rise rise, equivalent to 8% of the deposits, the liquidity disappeared and The rates between the banks that averaged 30% before the disarmament of the Lefis jumped: in the week they doubled with an enormous intradiary volatility. ”
A scenario similar to 2018
The professional indicated that “without de facto stocks, the economic scheme is more similar to that of the second agreement with the IMF, which started in August 2018, where fiscal and monetary policy were both very contractive in a context of enormous formation of external assets (escape) ”.
“It is true that today andl Primary fiscal surplus of 1.6% of GDP contrasts with a 2.3% deficit of GDP in 2018 (1.5 points less than 2017) and the bet, as well as then, is set out in the reopening of the capital account after the electoral result, ”he explained.
However, he said that “So that this time it is different, even with a good electoral result, the economic program will require a new reset with a dollar-tassa equilibrium that does not end up bursting the activity ”.
Attack the fiscal deficit does not reach
In another aspect, the director DE Ecogo He warned that the proposal consisting of attacking the problem of the Argentine economy from solving the fiscal deficit does not reach. “Given the inherited debt stock (that of the Central Bank and that of the Treasury), fiscal consolidation is not enough to ensure the disappearance of fiscal dominance,” He raised.
In that sense, he added that the decision of the government to “clean” the balance of the Central Bank passing its debt to the Treasury “It does not work if the country risk collapses” And if the Ministry of Economy “cannot assemble a financial program to refinance capital maturities and those of interest.”
Source: Ambito
