The economist and executive director of Libertad y Progreso analyzed the exchange situation and warned about the political and economic risks for the October elections.
The economist Aldo AbramExecutive Director of Freedom and Progress, was interviewed in the program What happened to us (Am with you), where he left strong definitions on the political and economic situation of the country. He referred to the situation of the dollar, the policy of the Central Bank and the impact of legislative decisions on market confidence.
At the start, he referred to the ability to intervention of the monetary authority: “The duty of the Central Bank is to defend the value of the weight so that we have a stable and reliable currency. You have your own dollars to do it and if you use them, nobody can cross that barrier”In that sense, he remarked that today the entity has net reserves that he did not have and that could discourage speculative attacks.
Abram pointed out that volatility does not respond only to technical factors, but to the history of Argentina: “Unfortunately my grandmother said that trust and death are two things that are lost and never recover. Although we behave a year and a half, investors do not trust that this will continue. ”
The economist also questioned the logic with which spending laws are approved in Congress. “Legislators approve expenses in troche and moche without saying where the resources will arise. Thus crises were generated: the State breaks, but does not suffer the State, citizens suffer”He warned. And he recalled that for decades, the financing via debt or broadcast ended in defaults, inflation and exchange of exchange.
Regarding the current political situation, he affirmed that he weighs more than the economy itself: “Most of this volatility is political. Everyone doubts how we are going to vote in October. If we decide to return to the past, there will be more savings escape, less investment and recession. If we ratify the change of course, the problems will begin to be reversed. ”
In relation to the exchange regime, Abram rejected orders to modify it. “The last thing to do is break the rules that you put yourself. No one will believe you new rules if you broke the previous ones. We have a solvent central bank, but until there are clear political definitions, volatility will continue. ”
Consulted by the rates and its effect on the activity, it was categorical: “This impacts negatively. These months will be recessive until we recover confidence. No one invests in a country that lives in crisis in crisis. The loss of rates will be given only when people save again in the local economy”
Finally, Abram warned that uncertainty generates a vicious circle difficult to break: “When the exchange rate rises, people emerge from the weights, That accelerates depreciation and inflation. It is logical that you begin to be reflected in wholesale prices and then in the consumer“And concluded with a future message:”If we follow the path of effort, we can reach the promised land. If not, we will return to the recession and stagnation”
Source: Ambito
