Javier Timerman: It has effect. Massa is a person who knows local and foreign interlocutors. She asked for all the power and they gave it to her. Now no one is going to question whether he has the support of Cristina Kirchner. I had been saying it for a long time, a politician was needed in the Ministry of Economy, and to unify all the economic areas, so that a single person could make economic policy. There has to be only one manager, so I commend him having that role. In addition, Massa also has a team.
Q.: What is the plan that the market believes that Massa has?
JT: Initially, his strength will be to get the Central Bank to accumulate dollars. Today that is the main point of tension. Because if the market sees that you run out of reserves, it is the greatest danger, because you have to make a sudden devaluation and you will go into hyperinflation. In the first place, it is expected that some type of agreement will be negotiated with the field so that they can settle and be able to make reserves. Later on, a set of measures will come to promote investment in some sectors. All this, together with its credibility, will lower the exchange rate tension in itself. Relaxing the exchange rate will reduce speculation about the devaluation, and thus reduce the gap. And then he will have to take care of the local financial part, there already with the departure of Martín Guzmán from the Ministry of Economy he had put his people to manage the Ministry of Finance. We saw him this week, he has already started to do a good job in reordering the financing in pesos. The rate hike is a good sign and a reflection that his team had already started working.
Q.: Do you think that Massa is going to be able to lower the exchange rate gap?
JT: I think you will be able to shrink it. But there you need two things. You have to lower the financial dollars, but also raise the official one, and that will also lower the parallels. And there the challenge is going to be that it does not translate into prices. The “Massa effect” will have been to understand if an exchange rate adjustment can be made with credibility. Lowering the exchange rate gap will help rebuild reserves. Because if you don’t start there, no one is going to believe that you have an economic plan. And then everything else will come, like budget adjustments.
Q.: This week you were with Silvina Batakis in the United States. How do you see Massa there?
JT: In the United States they see him very well, he is a person who was always close to investment funds, he took care of that profile. I tell you more, he was the favorite of the markets in 2015, even more than Mauricio Macri, because it was believed that he had the management capacity to come from Peronism, which they expected that Macri would not have. Anyway, it must also be said that Batakis was a very capable person and he did very well in Washington, especially with investors, because he talked about rebuilding a relationship with the market, leaving a better image than Guzmán at that point. I value his honesty, patriotism, humility and his technical ability.
Source: Ambito
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