The letter of the procedure manual Kristalina Georgieva He says that to grant Argentina a new agreement with fresh money -perhaps an additional US$10 billion- it’s necessary that The Government takes its leap of faith and unify? the exchange rate at a higher level than the current one. This is the only way to explain that the Minister Luis Caputo has accepted, by mutual agreement, and as is usually done, to sign the organization’s staff report in its latest edition.
Another very different question is whether he will fulfill his commitment this time. It seems unlikely. No minor detail that supports this hypothesis, The minister has tired of saying publicly in recent days that he will not do it. It is known: if there is no God who gives meaning, life is absurd and everyone can do with it whatever they want.
Dollar at $1,450: a fight between the red circle and the IMF for the bill
However, it is advisable to stay healthy. Both the president Javier Milei like the minister Luis Caputo have transformed into a mantra that the validity of blend dollar (exports are settled 80% at the official exchange rate and 20% at the free exchange rate) and 2% crawling peg. But the “blend,” as agreed with the IMF, is supposed to conclude within a week.
There is a fact that helps to see. A small survey conducted by Ambit among five mass consumption companies, among the most relevant in the country, provides the following data: In all cases, these firms project an official exchange rate that would be between $1,350 and $1,450 at the end of the year. In short, they do not believe the Government when it insists that it will maintain a crawling peg of around 2% per month.
With this projection, something could be inferred that the IMF has already slipped: that the equilibrium exchange rate at the end of May was $1,150. Consider that last week The future dollar was traded on the MATBA Rofex at $1,181 by the end of the year, quite far from the $ 1,231 marked fifteen days ago. What does all this cumbersome projection device mean? Let the reader draw conclusions from the marenostrum that will be the exchange tensions.
Minister Luis Toto Caputo, alias Sisyphus and the punishment of the gods
So, as if it were some kind of punishment, Luis Caputo acts as Sisyphus. Mythology tells that Sisyphus He was so ambitious and cunning that he had managed to deceive the gods. Although it is not relevant, he had witnessed the kidnapping of Aegina, a nymph, by the god Zeus.
He decides to remain silent in the face of the fact, but When Zeus finds out, he punishes him. The penalty consisted of lift a heavy stone down the side of a steep mountain with the misfortune that when it reached the top, the large rock fell again, so Sisyphus I had to carry it, eternally to the top.
So, Caputo must carry the stone-promise that there will be no devaluation in a context where it has not only felt the pressure of the income of Federico Sturzenegger to the Government, but also that kind of escape forward that is the president’s Promethean agenda Javier Milei in its promoted campaign of inflation, which will decrease step by step but could encounter a “V” rebound. The dilemma is well known: if he releases the stocks or relaxes the mantra of the dollar-blend + 2% crawl, then it could generate a new inflationary wave that will take President Milei out of his Promethean streak..
Welcome Fede Sturzenegger to Olympus: there is no money, there is stocks
For the first, the Hegelian dialectic will have to be enabled: Minister Caputo is already a mirror of what both the IMF and Federico Sturzenegger are supposed to want him to do.. It is by action or omission that it will begin to be measured from now on. If it continues as it has been until now, it will perhaps be a “rejection” of what the IMF. If you accept the changes, he will be a child of that request.
For example, releasing the stocks and unifying the exchange rate. It is known that Sturzenegger wants the joystick that moves resources, access to some budget accounts, some additional snipping, putting here what comes from there, and so on. All of that was denied to him by his highness, alias “no one touches Caputo’s ass.” In the Treasury Palace they then believe that Milei blindly trusts Minister Toto, pointing out that only he has the budget key.but they discount that Luis Caputo himself does not plan to leave the Government without first having lifted the exchange rate.
Julio Velarde.jpg
Courtesy: Noticiasporelmundo.com
I have the Velarde poster in my room, says Georgieva
To that is added the wet dream of Kristalina Georgieva, a certain Julio Velarde Flores, the president of the Central Reserve Bank of Peru. With 20 years in office, Velarde is more famous than Messi on the continent of finance, thanks to the supposed success of having overcome inflation, accumulated surpluses and promoted an unprecedented growth cycle in that country.
Although semi-unknown to the local red circle, its unavoidable reference in these lands is Sturzenegger himselfhost of the Peruvian at the BCRA Monetary and Exchange Days organized opportunely when the Di Tella economist was the head of the entity.
Precisely the IMF has imposed it on Luis Caputo: in the last report, it was mentioned as the model towards which Argentina should go, a free floating exchange rate added to an autonomous government policy, a message for Santiago Bausili.
Meanwhile, the discussion – almost settled – of the Bases law and the fiscal package. Congress will be the epicenter, once again, of the shock wave that promises to strengthen the economic plan, in the eyes of the Casa Rosada. To this we must add two meetings that also promise to recalibrate forces: a summit of northern governors today, and also the meeting of the governors of Together for Change on Wednesday.
Source: Ambito
