The economic team does not plan to modify, in the immediate future, either the monetary policy scheme or the crawling pegofficial sources confirmed to Ambit. What’s more, the president himself Javier Milei He reiterated an official statement in this regard on social networks this Tuesday.
The head of state revalidated what was published on social network X, on June 13, by the Secretary of Finance, Pablo Quirno. The official reproduced a statement that reads: “The BCRA plans to advance in the liberation of exchange controls and greater exchange flexibility as long as these measures do not imply excessive risks for the process of reducing inflation and strengthening its balance sheet., as reflected in the Agreement (with the International Monetary Fund). The process will be defined by the Argentine authorities themselves, contemplating the evolution of the relevant economic variables, who will share with the IMF the parameters that will be monitored. without including commitments of specific dates or measures.”
It should be noted that the opinion of the Fund’s technicians coincides with the Argentine authorities, in that the relaxation of exchange restrictions must be carried out progressively and without taking unnecessary risks, according to the statements of the multilateral organization.
These speculations were fueled by references contained in the report that, to sustain progress on the plan, among other aspects, progress is needed “toward an improved monetary and exchange rate policy framework.”
Monetary and exchange rate policy
The Fund has always been in favor of a free exchange rate and against appreciation. In the latest report it points out that, after the initial macrodevaluation, the real exchange rate has tended to converge to its equilibrium level.
It could be interpreted that the IMF does not want the peso to continue appreciating and here is a discrepancy regarding inflation projections. The international organization believes that The price index will tend to be around 4% monthly towards the end of the year, but the Treasury Palace anticipates that it will approach 2%, converging with the devaluation pattern.
In the environment of the Minister of Economy, Luis Caputoit is said that The reformulation of the scheme can only be implemented within the framework of a new program with the Fundwhich has already begun to be negotiated since the current one expires in November.
The topic was discussed by Milei with the managing director of the IMF, Kristalina Giorgieva, in the context of the G7 meeting that took place days ago in Italy. The President raised his intention to sign a new agreement, which should be accompanied by fresh funds.
In the Casa Rosada it is said that, once a new agreement has been reached with the IMF, The World Bank could accompany the process by granting important loans, according to what was discussed by the president with the head of the World Bank, Ajay Banga, also at the G7 meeting.
Release of the dollar stocks
In the latest Staff Report it is noted that, Towards the end of July, the Ministry of Economy must report on what the management scheme will be to release the exchange rate.
Official sources revealed to Ámbito that at the end of July it will be presented a framework (a roadmap) that will explain how the gradual liberation of exchange restrictions will be.
Another not minor point is that At no point does the report refer to dollarization. On the other hand, it highlights that the Fund’s technicians “welcome the intention to make a transition to a new monetary regime that would involve “currency competition”although further work is needed to define some of the key fundamentals.”
Source: Ambito
