Officials close to the government spoke of the lifting of the restrictions and the pressure exerted by the reserves to prevent the decision from being taken, despite the fact that the gap has already reached 30% in recent days.
The Government acknowledged that the lack of dollars It is the last requirement necessary to leave the exchange rate trap. The Central Bank has maintained a net sales balance of 114 million dollars so far in September. The drop in financial dollars and, consequently, the gap in values falls below 30% In recent days, the possibility of lifting the currency restrictions has been favoured. But now is not the time; without dollars, the Government is not willing to take that risk.
This is how he recognized it Felipe Nunezone of Luis Caputo’s advisors and director of BICE, in radio statements: “The Central Bank still needs to be capitalized with reserves.” On Radio con Vos, the economist also said that “any stock in pesos that may be floating around and could go to the exchange rate, the famous monetary surplus or ‘overhang’, must also be cleaned up.”
The IMF and money laundering, key issues for the Ministry of Economy
Along the same lines, Luis Caputo seems to have two things in mind: the IMF and money laundering. The Minister of Economy spoke at the Rosario Stock Exchange, in the framework of the 140th anniversary of that entity, and anticipated that the next revisions (the eighth and ninth) of the International Monetary Fund (IMF) could be done together and then, from then on, a new agreement could be negotiated with the IMF, within the framework of which he hopes to obtain new disbursements. “We will use the funds to rebuild the reserves and the balance sheet of the BCRA,” he explained.
The official also insisted on the need for as many Argentines as possible to join the money laundering process. “If everyone They take their dollars out of the mattressyou can be sure that we will return them to you because they will be for the benefit of everyone,” he emphasized. And he told those present, mainly representatives of the countryside and the world of finance: “You know that you can count on us and together we can build what Argentina will be in the next 30 years: the fastest growing country in the world.“. In this way, he paraphrased his deputy minister, José Luis Daza.
“Then there is the option of asking to go to a new program or not. Asking for a new one has the advantage that you can request additional money, not so with the old program. Hopefully we won’t need to do it, but to restore the balance of the Central Bankas you know, is a priority for us; we welcome it with US$ 12 billion of negative net reserves, in addition to the US$ 60 billion debt to importers,” he said Caputo.
In the context of money laundering, the private deposits In foreign currency, they recorded US$21.263 million in cash on Thursday, September 12 (+365 million or 1.7% compared to Wednesday 11), a maximum stock since October 2, 2019, according to data from the BCRA.
Caputo Bag of Cereals.jpeg
The difficult path to escape the trap
In this framework, the national deputy and also economist, Jose Luis Espertgave more details of the Government’s request to the IMF. “As a government, we want to have between US$ 7,000 and 10,000 million of net reserves, to be calm that completely releasing the restriction There will be no shock to the dollar that will affect the priority objective, which is the inflation rate.”
Initially, Javier Milei had said that the condition for lifting the cepo was to eliminate remunerated liabilities, a job that the Central Bank already did with the transfer of Leliq to LEFI. Additionally, Milei added that inflation should keep pace with the crawling peg at 2% (the latest wholesale inflation data for August was 2.1%). However, reserves are the new condition. Will the restrictions be lifted this year, or will they wait until 2025? That is the main question for economists.
Source: Ambito
