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the reform of the financial sector studied by Javier Milei, the furor over the dollar mix and the patience of Luis Caputo

the reform of the financial sector studied by Javier Milei, the furor over the dollar mix and the patience of Luis Caputo

President Javier Milei does not rule out the most disruptive proposals that he exhibited during the electoral campaign. The idea of ​​“anti-run” free banking haunts the conversations he has with a Spanish economist about the profound reform of the financial system that he wants to carry out. Meanwhile, Luis Caputo continues to seduce investors with the fiscal anchor but does not rush the exit from the stocks. In closed neighborhoods a new fashion is imposed: professionals who liquidate “dollar mix” to pay the credit card.

The Baglinizing ray crosses Argentine politics. The pragmatism that libertarians despised until December 9, took center stage after the 10th. There was no dollarization at any price, the Central Bank was not closed, the Country tax increased and also the tax on liquid fuelsall this without the president having to fulfill the promise he made in 2021: “Before I raise a tax, I cut off my arm.”

That does not imply that Javier Milei has discarded the most disruptive proposals that he popularized. During the Llao Llao forum, The President told the businessmen present that he plans a profound reform of the financial system. It is something that he is debating with a Spanish economist, people around him say, and that would imply radical changes in the scheme that we know today.

It is a “free anti-run banking” system in which demand deposits would have a 100% reserve requirement.. This idea will be complemented by investment banking that would work entirely with securitized operations. “In this way the risk of a run disappears, everything would be cleaned up via prices,” they heard Milei argue.

In this scheme, sIf banks wanted to eliminate volatility, they could retain cash to protect fund prices they manage, but they should do so at the cost of offering lower returns. All this, they emphasize, would occur in a context where the Treasury will stop requesting financing because the public administration will reach a surplus.

The immediate criticism that arises from different actors in the financial system consulted by Ámbito is that this could reduce the financing capacity and increase the interest rate. TThree sources in the sector agreed that it would bring greater risks: “There is no liquid and deep capital market in Argentina to replace the Central Bank as a lender of last resort.”they say

Caputo’s patience with the stocks

In the same week that the President spoke in front of the most important businessmen of Argentina in Bariloche, the Minister of Economy Luis Caputo took an exam in front of foreign investors in Washington during a seminar organized by JP Morgan at the Park Hyatt hotel

According to those present, the room was full to the point that “not one more person could enter.” In the speech he titled “Argentina: stabilization, deregulation and sustained growth”once again put the order of public accounts as a priority and stressed that the official exchange rate is not behind.

And the stocks? The Government makes it clear that they will not take risks. At this time, in the event of an eventual opening, the weights of retained profits of companies that were not transferred abroad, among others, could pressure a Central Bank without resources to a new devaluation.

In turn, this would accelerate the inflationary process. As Ámbito explained weeks ago, the disinflation path is the absolute priority at this time of the Government, the rest of the fronts are subordinated to that objective.

The furor over the “dollar mix”

We will then have to wait for a total release of the stocks. From now on, partial flexibilities can be observed, such as the one announced last week by the BCRA for access to the Foreign Exchange Market for micro, small and medium-sized companies. “They are going to test it,” a member of the economic team explained to this medium. Step by Step.

Although this Friday the president described those who flee foreign currency as “heroes”, access to the greenback has never been so closed. According to PxQ data, In February 2024, 94% of imports were financed. It is the highest mark in a series that goes from 2019 onwards and shows how the conditions of access to the exchange market have worsened.

At the same time, access to the savings dollar remains extremely limited for individuals, one of the most unfriendly facets of exchange restrictions for the middle class. For this reason, in the WhatsApp chats in the closed neighborhoods of the Buenos Aires suburbs, where professionals abound, The “dollar mix” phenomenon is growing.

Workers who, due to the effect of the liquefaction of their income, liquidate savings to other neighbors to pay the due date of the credit card. They do this by dividing the spread, half for each one. He who buys does it a little cheaper and he who sells receives a few pesos more than in a cave.

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Source: Ambito

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