The economist predicted that the floating exchange band system will end after the elections and a new regime will be installed.
The economist Christian Butler made a critical analysis of the administration of Javier Mileiemphasized that the economy “is not managed with rabbits from the galley” and that it must be propped up “on the right side.” In this way, he warned that you cannot spend “eight months trying to gain time because in reality “What you are losing is credibility and economic power.”
Days before the elections Butler He spoke during a radio interview on AM Con Vos about the economic ups and downs of recent times, both in real and financial terms, and predicted that the floating exchange band system will cease to apply after the legislative elections.
“The market is the one that has already determined that the bands are finished. You probably won’t have the new regime next week, simply because the Central Bank has many dollars sold in future dollars at the end of October, which is why there is an incentive to wait a few more days and Any modification should be done directly in November.. It will obviously depend on demand as well. “It will depend on the result of the elections and that is what the lawsuit does with respect to those following days,” advance.
In this way, he referred to the “surprising” intervention of the United States Treasury in the market, pointing out that this Wednesday it sold around US$500 million and considered that “it will continue to put the missing dollars” in the exchange wheels prior to the elections. However, he maintained: “I don’t see that next week, once the election and so on are over, the US Treasury will continue buying pesos, continue selling dollars.”
Regarding what could happen to the US currency next week, and in the face of a possible change of regime, Buteler predicted: “It’s not that I see the exchange rate that has to fly. The prices that you have today in the dollar are not equilibrium prices.That’s why demand greatly exceeds supply.. But the truth is that I don’t see that the dollar has to rise by 40, 50% or a similar number. I believe that if you release the exchange rate, it will probably settle higher than these values, but there would not be a very abrupt jump because it has already settled quite a bit in recent months,” he said and stated that he does not believe it will reach 2,000 pesos.
Christian Buteler emphasized the need to lower interest rates and warned about confidence in the economic team
On the other hand, he referred to the real economy and pointed out that the crisis in the “micro” is “one of the reasons why you see that the exchange rate surely has to get out of the bands.” On this point, he explained: “You need to lower the interest rate. They are very high in real terms precisely to contain demand due to the exchange rate, to reward more those who stay in pesos and do not go to the dollar. By lowering that rate, activity has to begin to rise again. It’s not going to be quick, but you would have to get out of this madness of trying to stop the dollar so that it also the real economy can begin that recovery that it lost in the first quarter of this year.
Finally, returning to the financial level, Buteler pointed out that the behavior of the bonds demonstrates “the market’s lack of confidence in the program and the economic team.” In that sense, he added that, after the Government’s latest announcements, “not only the payments of the bonds for all of 2026 are guaranteed, but also until 2027” but in any case the bonds go down. “The only thing that can explain that to you is the lack of confidence that the economic team generates today,” he concluded.
Source: Ambito
