Marina Dal Pogetto, One of Argentina’s most prominent economic analysts, gave her opinion on the recent economic measures of Luis Caputo, the sharp drop in the gap that brought the CCL to $1,200 and how the exchange rate scheme continues in the event of a possible exit from the trap. In radio statements this Wednesday questioned the 2% crawling peg and considered that the Government will need dollars to organize the economy.
Luis Caputo announced yesterday that the Government had achieved a financial surplus for the sixth consecutive month with a positive balance of $233.189 billion. In this context, From the Pogetto She said that the primary surplus is “a necessary but not sufficient condition” and was harsh with the Government: “Without a surplus, this would be derailing.”
In today’s interview on Radio con Vos, he explained that at the beginning of the Government’s economic program, he considered the devaluation with capital controls as “necessary” but then claimed that the “carry trade” had been valued. “At first you bought dollars and celebrated because you ordered the importers to buy in installments,” he said.
Dollar: what Marina Dal Pogetto said about the rate of devaluation
In this context, for the economist of the consulting firm EcoGo, the “crawling peg lasted longer than desired” and pointed out that maintaining this scheme caused three things: first, despite the urgency to eliminate the BCRA’s liabilities, the problem is that it stopped buying dollars.
Secondly, the exchange rate that had started out as overshooting is now tending to lag behind.
Finally, the entire liquefaction that took place was to exchange one debt for another – in relation to the transfer of debt from the BCRA to the Treasury – “but the debt remains on the balance sheet.”
For From the Pogetto, “The dependence on capital controls is the same as at the beginning. The question is how to manage this financial program.” In that sense, he explained that the reaction to Caputo’s controls caused the CCL dollar is below $1,300 and added: “If they don’t get fresh dollars, it’s a short sheet.”
Fresh funds: the economist’s view on what the Government thinks
In another order, the financial analyst said that the Government has three things in mind to capture those dollars it needs. First, the arrival of Donald Trump to the US Presidency “and that there is an agreement with the IMF at the end of the year.”
“The RIGI has something else in mind, which I don’t like as a macroeconomic regime; it will unblock some investments. These investments come through the CCL and the dependence on the blend can be reduced.. The third component is whitewashing. You are always discussing the bridge to get to the election”
“The 2% shoe does not fit the necessary recomposition of relative prices and they will use all the devices to keep this going. If you don’t get dollars, this can’t continue,” he reiterated and stated that economic growth will not come in the short term: “There are no dollars to boost the growth of the economy” and warned that “the signal to build stocks appears.”
Finally, in relation to the lifting of the restrictions, he recommended that the Ministry of Economy “sit down and think about how to defuse the mess they are in” regarding the composition of the debt and the maturities.
Source: Ambito
