For him economist Pablo Ferrari“the dollarization in the strict sense, that is, the imposition of the dollar as the only legal tender, is the ideal project for this first stage of the new accumulation pattern that is being configured” with the new Government. Thus, consider that It is an objective of the current managementbut recognizes Ambit It is not clear whether it is long or short term.
Are there dollars to dollarize?
However, on the other hand, he points out that, currently, “there are not enough dollars to carry it out” and does not rule out that the heading towards hyperinflation is an economic policy objective as an “instrument of liquefaction of purchasing power and moving towards a much higher exchange rate”, which is one of the necessary conditions for dollarization.
In a similar vein, from Ecolatinaassure in a report that “the strategy adopted in pursuit of resolving the inherited monetary imbalance is consistent with an attempt at dollarization on the horizonsince, by reducing the stock of remunerated liabilities of the BCRA, accumulating reserves along the way, the exchange of pesos for dollars becomes more affordable.”
This is a key element that analysts observe as a possible indication of a dollarization plan: he disarmament of liabilities of the BCRA. This is evidenced the economist Lorenzo Sigaut Gravina, from the consulting firm Equilibrawho assures that “the aggressive advance on liabilities remunerated in pesos is progress in this sense and, in that plan, the key is the BOPREAL, bonds intended to absorb the commercial debt of importers.”
Ending the liabilities of the BCRA, a key objective
Sigaut Gravina maintains that “That is a final blow for the destruction of remunerated liabilities and if these instruments allow, within a month, to withdraw liabilities from the BCRA, they will be closer to dollarization.”. And he considers that one of the problems that the Government has in dollarizing is the impossibility of issuing debt in dollars, but he points out that it would be doing so through these instruments and that, for this economist, could mean being much closer to dollarization. .
And in this scenario, Ecolatina observes that one of the restrictions for the adoption of dollarization is relaxed: the financial one. But they warn that, nevertheless, this currency change will be a discussion for a few months, when the monetary imbalance is resolved, which implies dismantle the exchange rate and unify the exchange rate.
While, Sergio Chouza, economist and director of Consultora Sarandíconfesses to being “skeptical” regarding the possible decision to change the exchange rate regime towards a foreignization of monetary policy and details his reasons:
- First of all, because he observes that All the initial measures implemented by the Government have to do with a program of very tough monetary astringency from the fiscal point of view. and that seeks to be an anti-inflationary anchor as the pesos in the market dry up. “That is to say, we are betting that there will be no pesos available at some point to put pressure on the offer,” he explains.
- Furthermore, on the other hand, he points out that, cWith looser monetary policy, the bet is that the private sector will begin to see borrowing as a tempting option. and increase the supply of goods and services.
“So, with the features of this program, including dollarization in the middle would mean adding some noise to a policy that has a fairly long maturation period”says Chouza.
Dollarization: an emergency plan for failure?
In fact, he anticipates that We are going to have inflation this month around 20% and considers that, even if good results are achieved in the project of anchoring the expectation, it will not be possible to bring that percentage to zero from one day to the next. “Reasonable levels could only be reached in 2025, returning to the dynamics of 2021, for example,” warns Chouza.
So for him, Going towards dollarization would imply resetting the measures of these first days, which is the initial plan, and is orthodox. However, he acknowledges that, “If these measures do not have the desired effect of controlling inflation, dollarization could be considered.given that there will be fewer pesos in the economy and that is an element that better prepares the ground to move forward in that direction.”
However, it must be taken into account that the shortage of reserves would give a bizarre conversion exchange rate to dollarize and nothing would indicate that in the coming months there could be an influx of dollars so strong that it would allow this variable to improve. Thus, for Chouza, “The dollarization scenario is possible in a context in which the current orthodox economic program goes very badly.”.
If it is not dollarizing, it is very similar
The truth is that, as Sigaut Gravina points out, everything would indicate that the current economic strategy is missing a stabilization plan in a context in which the inflation It is running at a very high pace and many in the Government see dollarization as the best option in that sense. In fact, Caputo, who from his consulting firm Anker criticized this plan before becoming minister, a few days ago put it back on the agenda.
Nevertheless, The Government’s path seems to be oriented in that direction or, at least, in a similar one.. And Ferrari considers that, “although the dollarization plan is not strictly consummated, we are already facing a depesification process that implies the normalization, institutionalization and ramification of the rooting of the dollar in the Argentine economy.”
And this does not sound crazy since The Government insists on the plan to resolve the complicated economic situation in Argentina step by step. In fact, sources of BCRA They did not rule out progress in a dollarization in the long term, although it is not the only program they contemplate in terms of monetary policy: they also talk about bimonetarism and a free choice of currencies by the user as viable options.
Source: Ambito
