The former Minister of Economy, Martín Guzmán, He assured this Friday that The Government “has already dollarized the economy” and considered that this “is the only plan it has.”
“I believe that the Government has already dollarized the economy and nothing would be so serious for Argentina. That would be for the country to abandon the path of development”said the former official.
For Guzmán, dollarization is explained by the issuance of the BOPREAL bonus: “It is a set of operations to convert the Central Bank’s remunerated liability in pesos into a liability in dollars. That is part of a much more general scheme that the Government has, which is also the only plan it has.”
Guzman warned about the issuance of debt in dollars by the Central Bank
“If one wanted to bankrupt the Central Bank, it is doing what is being done. The Central Bank has never issued debt in dollars, because it does not issue dollars. Its liabilities are in the currency it issues. It may have inflationary effects, but it does not go bankrupt. Now “For the first time, we have Central Bank debt in dollars.”he warned in statements to Radio con Vos.
And I add: “What happens if tomorrow you don’t have the dollars to pay the debt? It’s a new situation in Argentina. And there is no serious country that dollarizes.”
“The relationship between liabilities in pesos and the dollars that the Central Bank has is changing in such a way that it is increasingly easier to reach a point where you do not need a big exchange rate jump. Dollarization becomes more tempting for the Government , but at an enormous cost for the country in the future”he emphasized.
Guzmán on the lack of confidence in the peso and inflation
The economist considered that the country has been with “a phenomenal problem with the currency, with the lack of confidence in the currency. But that does not mean that it should be abandoned.”
Regarding inflation, he commented: “It may drop in January compared to the December value due to the very high devaluation jump, but the monthly inflation floor will resemble the highest rates of the last months of the previous Government, which were above 10%.”
In this sense, he said that “Reducing the deficit is, basically, managing the distribution conflict, who pays for the adjustment. And that will once again generate pressure on prices. And the official real exchange rate will appreciate.”
According to Guzmán, “Today there is a crisis of inflation and purchasing power of income. With dollarization, you are going to see a crisis of the productive system, there is no work, there is no income for many people. The big problem becomes unemployment.” “Let’s think about whether we are going to be able to have a competitive country when the value of the currency is determined by the United States,” he added.
Finally, the former minister admitted that during the administration of Alberto Fernandez, of which he participated, “It was impossible to continue with an economic program that made sense and was giving progress to Argentina. Since that was dynamited, the current Government has an advantage, because it is not that today the opposition is organized around the idea of a program. And that allows it to advance in the way it is advancing, generating damage to Argentine society, turning it into a more divided society.”
Source: Ambito
