The Government believes that it has managed to overcome a difficult week, but that the worst is still not over: that “the attacks continue” and that they must “stay on guard,” according to those close to the President.
In the office of Javier Milei In the Casa Rosada there is no television set, nor screens connected to economic news agencies as might be supposed from his passion for economics. His means of communication par excellence is his cell phone, via social networks, especially X.
The description of the president’s work environment helps us understand how Milei navigates these moments of tension in the financial and exchange markets.
The government claims that they have already faced “two market blows” and that the attacks may continue.We must not lower our guard”, Milei often tells his economic team. “It was a difficult week, but it ended with very good economic data,” they argue.
They mention wholesale inflation in June (it fell to 2.7%) which foreshadows a continuation of the downward trend in the consumer price index; economic activity which showed a seasonally adjusted growth of 1.3% in May – which cannot be explained only by agriculture – and the resolution of almost 80% of the puts.
The president tells his close associates that he is convinced of the direction he has taken and, therefore, It is not concerned with fluctuations in the dollar or bond prices during the day.
Reiterates “absolute confidence” in the Minister of Economy, Luis “Toto” Caputo and his team – they are “untouchable” – and he delegates day-to-day management to them. Furthermore, he tends to get angry when someone criticizes “Toto”, as was the case with Teddy Karagozianrecently expelled from the President’s Council of Economic Advisers at Milei’s request, following criticism that the textile businessman made about the policy of the Treasury.
The president is determined not only to lower inflation, but to “end” this scourge.It is the commitment I made to the Argentines and I will keep it strictly.” insists on his inner circle.
With little political representation (particularly in parliament), the support of public opinion is the main pillar of the Government of La Libertad Avanza. In this sense, some yellow lights have been lit.
Although Milei’s administration maintains a high level of approval, in the last two months there has been a deterioration in the evaluation of the Government’s performance.
A Synopsis survey found that in July 50.4% had a negative view, compared to 43.7% who had a positive view (in May 45.7% had a positive opinion and 44.1% had a negative one).
In this context, it is not surprising that the Government has decided to wage a frontal battle against inflation – its most obvious political achievement.
Issue
As Milei has repeatedly stated, he believes that inflation is a monetary phenomenon and that once the issue is cut, the problem is over. That is why his efforts are focused on ending the printing of banknotes.
In his logic, it makes no sense to talk about a lag in the exchange rate. “How can they be so stupid saying that the dollar is behind when exports have soared?” points to his loved ones.
He also says that those who doubt the country’s solvency to face its debt are wrong, because he says that it will have enough surplus to meet its commitments.
The Government assesses that in recent days they suffered two market blows that “aimed at taking the financial dollar to $1,800.” In this sense they place the decision of Banco Macro -which they link to Sergio Massa- to execute the puts.
In the official corridors there is also severe criticism of the IMF’s actions. In particular, against Western Hemisphere Director Rodrigo Valdez.
Without mincing words, the president accused him of “who has bad intentions towards Argentina manifests. I am convinced that this person does not want the best for Argentina. And he was absolutely considerate with the previous government. And we, who are an example of a fiscal effort never seen before in the history of humanity… Well, but he has another agenda, obviously. He is the Forum of San Pablo, he mixes the political and the ideological. In other words, he does not want Argentina to do well. But we do not care, we continue forward.”
Ambito communicated with the IMF to request some consideration on the subject without obtaining any kind of response. Hopefully, the saying “silence is consent” will not apply in this case.
In any case, it is to be assumed that the organization will take into account the severe accusations of the president of Argentina, who is also the largest debtor of the organization.
Source: Ambito
