To avoid the negative consequences of a currency jump, the economist suggested that several conditions must be met before the exchange rate restrictions are lifted, where trust will be key.
The economist Claudio Zuchovicki He gave an interview in which he spoke about the exchange rate restrictions and shared his views on the impact on the economy and the need to lift them “gradually and carefully.”
In an interview with La Capital, Zuchovicki was cautious and stressed that its elimination is essential for economic growth and must be done “progressively” to avoid negative consequences.
What conditions must be met to remove the clamp?
“The clamp is horrible and it delays”he stated bluntly. However, he warned that a hasty lifting could jeopardize the efforts and adjustments made in recent times. The economist argued that for the the removal of the cepo has a positive and lasting effect, It is essential that it occurs at a time when confidence in the Argentine economy has been restored.
“For it to make sense, it has to be done at the moment when the Argentines start to trust. If you lift the restrictions and we all go to buy dollars, it will go wrong.”he explained, stressing the importance of the measure being accompanied by a context of stability and confidence in the peso.
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He also stressed that the lack of confidence is one of the main problems facing the Argentine economy. According to his analysis, the key to a successful lifting of the cepo lies in Argentines perceiving that economic policies are moving towards greater stability.
Only then, he said, will it be possible to gradually lift the exchange restrictions without causing a massive flight to the dollar, which could destabilize the economy again.
Zuchovicki spoke about investment
In addition, the economist stated that the cepo is only part of the problem, and that its elimination must be accompanied by other measures, such as reducing the tax burden and implementing policies that promote investment and growth.
Finally, Zuchovicki was emphatic in his positive view of the present and future of investments in Argentina, highlighting that “it is time to invest in Argentina” and that “it is an opportunity that young people cannot miss.”
Source: Ambito
