The markets have given us a wake-up call

The markets have given us a wake-up call
The markets have given us a wake-up call

After the jump of the Dolar blue until the $1,430, the national deputy Jose Luis Espert I affirm that “The markets have given us a wake-up call” due to the lack of certainties regarding the second stage of the economic plan, but assured that these are expected effects in “a country that was detonated.”

The liberal economist and president of the Budget Commission of the Congress He referred to the progress of the economy and highlighted the positive data of the first seven months of Javier Milei’s government: “The BCRA has accumulated US$10 billion in net reserves, the Risk country was double in September 2023, the free dollar Adjusted for today’s prices it would be $2,600 and we are at $1,400.”

In this regard, he stated that “There is a glass half full because we came from a horrible place” and stressed that “We are much better off than in that horrible place.”

However, he acknowledged that he also “There is a glass half empty, which is the last two weeks, in which the markets have given us a wake-up call”. “The Country Risk has risen by 400 points, the dollar increased by about $300 and during June the central bank did not accumulate dollars,” he admitted Expert.

José Luis Espert: “The market did not like the fact that there was no certainty about when the restrictions would end”

Regarding the diagnosis on the rise of dollar and the Risk country, The libertarian deputy considered that The market “did not like that there was no certainty about when the restrictions would end”But I want to tell you that the restrictions will end. I hope it happens before the end of the year. I am not going to curse the market for two weeks, which is against it.”

On the reaction after Friday’s failed press conference, Espert He clarified: “The minister Luis Caputo and the economic team are the first to hate the cepo, let the market be clear that we are the first to want release it; But when there are government responsibilities… We need $5-10 billion more in net reserves to ensure that there won’t be a dollar shock. that affects macroeconomic stability. We are discussing the timing, but there is no doubt that the government believes in exchange rate freedom.”

Along those lines, the deputy said that volatility will continue in the short term. “It is important for people to know that this is not always going to be a straight line, there will be, on an upward line, some swings, sawtooths“, he said and stated that it is because Argentina is “a country sick with populism”so “the road to the heaven of freedom and well-being will not be without bumps like those of the last few weeks. Let’s face it.”

José Luis Espert’s criticism of Domingo Cavallo

To illustrate the difficulties that the government is facing, Espert recalled the first presidency of Carlos Saul Menem, One of the examples that libertarian administration often uses as a reference for economic success: “Until he got the convertibility right in March 1991, he had two hyperinflationary outbreaks: one in 1989 with the Bonex Plan and the other in 1990, which ended with decree 435. That was before beginning one of the most virtuous periods of democracy, which were the five years from 91 to 96.”

The economist took the opportunity to attack the former minister of Menem and the Alliance, Sunday Cavallo, who recently outlined criticism of libertarian economic policy and called for the lifting of the restrictions. “The father of convertibility was also responsible for the worst crisis in history in 2001-2002. We are not going to believe that it was Fernando De la Rúa’s fault…” he said.

Returning to the economic situation of the government he represents, Espert said that there is still a series of things to do. “normalizations” of the variables. “There is a need to adjust tariffs and eliminate the exchange rate restriction, which could lead to a rise in the dollar that would affect prices,” he acknowledged.

Source: Ambito

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