This Saturday the International Monetary Fund (IMF) ratified having approved the goals of the Argentine economy and the disbursement of US$ 5,400 million. In that context, the former director of the Central Bank (BCRA), daniel marx referred to the local situation in the framework of the droughtthe inflation and the exchange rate.
“The disbursement that came from the IMF is to pay the IMF itself because there are expirations there too. One of them had happened days ago and was pending and another is next week. There is no fresh money there. It is money that is recycled” insisted Marx and tied this fact to the situation of agriculture with respect to the drought:”This export income is missing and what we are noticing is that the answer to this is to try to encourage other income or advances. hence the exchange rate and payment restrictions on imports”.
He also highlighted “some efforts, such as seeking that the swap with china have liquidity and serve for reserves” but he maintained that “it is still an uphill road.” Marx expressed to Radio Milenium that “many times we tend to live on the edge of possibilities and when there are adverse effects, some countries resort to the Monetary Fundbut we already resorted to them and with very large amounts” for which “It is difficult to find those liquidity buffers that have already been used”.
“The drought had and has a very strong impact. The decrease in production and exports expected for this quarter are between 15 billion and 20 billion dollars of impact. It is a very strong number compared to exports of 90 billion”, analyzed the economist and remarked that “much of this income normally occurs in the second quarter of the year but we also had drought last year on the wheat harvest and there was an expectation in this quarter of whether or not there was a soybean dollar or something similar, for which reason the export settlements in this sector decreased”.
As a result of this, Marx believes that “there is going to be some type of particular change linked to the agricultural sector but it is still to be defined”. “The impact of the drought. We are talking about 15 billion dollars more in exports,” she warned.
“The 400-peso dollar is an exchange rate that indicates a very substantial devaluation. When one uses that exchange rate to convert Argentine prices into international prices, Argentina seems extraordinarily cheap“, assured the former director of the BCRA and indicated: “If all the exchange rates were unified, it would be below 400. If some of the uncertainty factors were removed, it would also be below 400.”
For the economist, whether a unified dollar is closer to the official one than that of cash with settlement “depends on the movements of capital and capital movements depend on trust and that’s where the disparity appears”. “The factor that most affects now is the missing product“, he sentenced.
He also referred to the leliqsconsidering that “the number is important. As the percentage of the product is 10 points, it does not seem so strong but what is happening is that with the high inflationthe banks take deposits that come with interest in line with inflation and that makes it necessary to renew the Leliqs for interest capital at these sums”.
“To the extent that deposits are maintained, the banks will continue renewing the Leliqs and growth has a lot to do with the interest rate policy accompanying inflation, which is unfortunately a fact. It is something that I think must be observed, we must try not to grow beyond inflation and try to recover the currency, to be able to lower inflation”, he explained.
Finally, he opined that the Argentine macroeconomic aspect is undergoing “a delicate balance. The alternatives are not easy either. One recognizes inflation and tries to lower it, I think it has to be a fundamental objective”. “There are different ways to fight inflation, but there are some more durable than others. Only with price agreement and the unbalanced rest ends up being a major problem”, he concluded.
Source: Ambito
