Journalist: What analysis do you make of Massa’s tour of the United States?
Daniel Marx: Is an advance. Both Argentina and the Fund owed this discussion. Good or bad, the country has a dependency on IMF disbursements which is impossible to deny. For these disbursements to occur, reviews must be passed, it is the usual mechanism of the organism that has its difficulty.
Q.: You had to be chief debt negotiator, how does the staff usually deal with reviews?
DM: The Fund sees this as a comprehensive discussion. They start with the tax issue, then go to the accumulation of reservesit is discussed whether there are adjustments, whether the deficit is measured in current pesos or as a percentage of GDP. There is a lot of technical debate. At the end of the day, everything has its criteria component and that is where the other procedures appear. But first it is necessary to have a more or less shared diagnosis, then to know what is being done in the future and, lastly, how this is reflected in the interpretation of some aspects of the agreement.
Q.: When the Fund sees an inflation figure like the one for August, what does it propose?
DM: I assure you that the Fund’s reaction to this is to ask for more fiscal adjustment and a higher interest rate. Back there, a debate can be opened because there are those who say that the rate hike has no impact because the monetary system is so small that it does not end up having an influence, but the Fund will tell you that it is small because the appropriate rates are not set.
Q.: How do you analyze the impact of the soybean dollar?
DM: It is giving reserves and fiscal relief because one receives the withholdings of those exports that are higher and at a higher price. It remains to be seen how much effect is permanent and how much transitory, as the stock is depleted it has a more permanent effect but, if the stocks are accumulated again, the effect will only be transitory.
Q.: Is it sustainable to think of a split foreign exchange market?
DM: If they are measures aimed at providing sustainability in the medium term, yes. But if they are measures that exhaust themselves, it is more complicated. So you have to see them in context. In practice, the rate of devaluation is accelerating and it is desirable to converge to a single exchange rate.
Q.: At the rate of what dollar does the economy move?
DM: There is a mixture, it is neither the dollar counted with liquidation nor the official dollar the parameter.
Q.: Can you think of a controlled devaluation?
DM: You have to see how it goes, the context in which it is placed. It is never easy to carry out a controlled devaluation. To the extent that one puts it into a later stabilization scheme, it is different than if it is done without an anchor.
Q.: We often hear that inflation is multi-casual, but what is the main cause?
DM: It is true that multicausal is a widely used word, but neither should we fall into the idea that there is only one cause. There are several issues. Some speak of an increase in the money supply, but today you hardly have it, although you might think that in the future you will have it. In addition, you have an inertia that is also an important component, very marked imbalances in relative prices, an economy that hardly grows.
Q.: Today, what worries you more, the fiscal deficit or the quasi-fiscal?
DM: Today I look more at the tax part. The quasi-fiscal is going to change, you have to look at the entire balance sheet of the Central Bank and adjust it for inflation, they are not things that can be easily homogenized. The stock of passes and Leliq went up a lot, partly because the Treasury was financed, partly because of the interest, but the rate paid by the previous Leliq until now had been below the rate of inflation. You have to keep an eye on it, but I don’t think it’s unmanageable either.
Source: Ambito
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