The President gave an interview after the presentation of the DNU with which he seeks to deregulate the economy and anticipated what the steps to follow will be.
Javier Milei gave clues as to when the Government would be in a position to eliminate the dollar trap. The President confirmed that the conditions must be in place for the entity to be able to withstand a possible dollarization of portfolios.
“We are going to take out the stocks when we finish clean up the BCRA and the whole monetary issue and when we clean up the monetary surplus from the economy. The stocks generate excess demand in the foreign exchange market, which has as a counterpart an excess of supply in the rest of the economy“Milei stated in an interview with Radio Rivadavia.
While, Milei He listed what in his opinion are the consequences of the restrictions on obtaining dollars throughout the economy. “This implies that the price of bonds is low and the interest rate rises. It implies that you have an excess supply in the goods market and activity falls. It generates a drop in the demand for labor, which under normal conditions generates unemployment. In Argentina what happens is that you have low unemployment but with miserable salaries. Removing the stocks is a mechanism that will rebound the activity“, held.
End of the stocks: can there be spiralization?
However, he recognized that moving forward in this direction in the short term has risks of inflationary spiralization: “But we cannot remove the stocks while the conditions are not in place to be able to withstand an abrupt portfolio change. Something that could happen or not but “We are not willing to take that risk.”
Dollar Dollar Pesos Blue
Mariano Fuchila
Milei’s phrase about the blue dollar
The President also highlighted that the decree published last night contemplates the possibility of freely acquire dollars in what was called the “free” – or “blue” – market, something that was previously prohibited despite the fact that famous “little trees” continued selling foreign currency outside the formal market. “Today in the free market you can buy whatever you want and no one is going to chase you,” he said.
“Now you can agree to contracts in foreign currencies and they have to be fulfilled that way. Do you realize the shock of freedom that all this implies?”
In this context, Javier Milei announced the end of the illegality of the blue dollaran activity that to this day, due to current regulations, is punishable by law.
The National Foreign Exchange Criminal Regime Lawthe sanctions regime in force for those who operate in the parallel dollar, establishes the illegality of all exchange negotiations that are carried out without the intervention of an authorized institution, such as banks or exchange houses.
Source: Ambito
