The Economist Emmanuel Alvarez Agis He assured that it is “impossible” to practice a dollarization in Argentina and called the proposal “inconsistent.” On the other hand, he warned about the risks that the emergency plan could cause. bimonetarism that proposes Together for Change and spoke in favor of a devaluation with an increase of withholdings as one of the tools to face a stabilization plan.
“Dollarization as one understands it is directly impossible and technically it is absolutely inconsistent“said the former official of Axel Kicillof in the Ministry of Economy.
“The referents themselves (Javier) Milei They are saying that it is a point of arrival and not a starting point,” he stressed.
For Álvarez Agis, if a dollarization in Argentina, “we put ourselves in a corset” that would lead to a double digit inflation and high unemployment rates. “My fear is that dollarization can start in a traumatic way,” said the economist in a talk for investors.
In turn, the former Economy official considered that the proposal Emilio Ocampo to put together a escrow to obtain US$40,000 million lacks support because he does not believe that there is a lender for Argentina for that amount.
“There are technical inconsistencies in this proposal, among them that the value of the bonds will not increase. Nor does Argentina give confidence to request a loan for US$40,000 million. And assuming that all this happened, would issue debt for 33% of GDPwhich you also have to pay later,” he explained.
Meanwhile, about the possibility of an exchange rate split as proposed Together for Change hand in hand with the plan he designed Carlos Melconianpointed out that there are risks that the gap between the official dollar and the financial persist for a long time and undermine the program.
“In this case, the bet is that people, due to a change in expectations, bring more dollars through the financial exchange rate, the financial exchange rate appreciates, brings it closer to the commercial exchange rate, and when they are together it becomes unified,” he explained.
In conclusion, Álvarez Agis estimated that the best alternative to face the current situation is a devaluation with an increase in withholdings to avoid a sharp jump in food prices of first necesity.
Source: Ambito
