Among them, the former Minister of Economy of the Cambiemos government Hernan Lacunza who, as is remembered, resumed the stocks after a period of exchange freedom that existed during that period.
“The trap can be lifted the day that the official and free exchange rate balances external flows (exports + investment + loans – imports – debts – hoarding). It has less to do with the stock of reserves and liabilities in pesos and whether monthly inflation is 4%, 2% or 0%,” he noted through the X social network.
In that sense, Ambito consulted three consultants about what the conditions would be to lift the stocks:
Javier Okseniuk, from Labour, Grouth and Capital (LCG) He said that “to lift the stocks you need an expected positive flow of dollars and a sufficiently positive stock of reserves.”
“A positive expected flow (for normal growth and demand for imports, which there is not today) is a necessary condition but may not be enough in the event of a run because There are no tools (the stock of reserves) to confront it,” he explained.
In that sense, he said that “with The stock alone is not enough because it would be consumed quickly if the flow is perceived to be negative.”
“I am of the idea that stock and flow must be adapted with different policies. For the flow, sooner or later it will be necessary to adapt the exchange rate strategy a little, knowing that debt laundering and exchange can help a little to manage times,” added Okseniuk, who considered that “the exchange rate cannot solve the problem by itself. the stock because it would be an overreaction.”
“For that you have to get medium and long-term financing, and today that is called ‘new agreement with the IMF’which at the same time will want there to be no doubts regarding the flow,” he explained. In that sense, he said that “the government has a good letter of presentation with the fiscal results.”
“In that framework, modifying the exchange rate strategy would in no way have fatal consequencesas mentioned. But it will imply that the government is more attentive and uses complementary tools to avoid remarking overflows and thus mitigate inflationary inertia,” considered the LCG economist.
For its part, Eugenio Marí, chief economist of the Libertad y Progreso Foundation, He maintained that “the key to getting out of the trap with a low social cost It is not waiting to converge to an exchange rate of supposed equilibrium, which is impossible to know.“But in establishing the conditions for the peso to stabilize and even revalue.”
“The reality is that, like all price controls, The exchange rate makes it impossible to know what the true equilibrium exchange rate is,” Mari considered. In that sense, he added that “in Argentina a lot of importance is given to finding an exchange rate that balances the foreign exchange flows between exports and imports”. “However, an empirical regularity in the world is that The rises and falls of the exchange rate are more explained by financial flowss than the commercial ones,” he warned.
Marí highlighted that “for Argentina, when the stocks are released, there will be changes in the composition of supply and demand, with some actors who will seek to exchange pesos for foreign currency to withdraw capital, and many others who will enter it. ”.
“The key then will be in expectations. Which includes three components: the macro, the micro and the political”, explained the economist from Libertad y Progreso.
In this regard, he maintained that “at the macro level, the government has already done a large part of the task, with fiscal balance and eliminating monetary financing of the deficit.” “The micro is essentially the productivity improvement agenda, which includes deregulation and structural reforms; where there was progressbut there are still big pending issues,” he added. Instead, he said that politically “it has to do with generating confidence that Argentina will not have a relapse and repeat bad economic policies.” “The faster and more progress is made on these issues, the lower the unification equilibrium exchange rate will be,” he stated.
Meanwhile, the independent consultant Ivan Carrino He said that “to open the trap the only thing that “A political decision is needed to tolerate the short-term cost of a rise in inflation.”. “Now, if you want to get out of the trap without impact, they have to hope that the gap is 0%. And for that the official dollar has to be equal to the parallel dollar,” said Carrino.
The consultant explained that “the government is betting that This equality occurs to the extent that the official rises 2% per month and the parallel does not escape.”
“That’s why they saidIf they increased the monetary base to buy dollars, they were going to sell parallel so that the base, at the end of the operation, would not be increased. Likewise, the base has grown for other reasons since July and yet the blue does not rise,” he stated.
The consultant explained that “the government says that this responds to the fact that the new Monetary Base pesos respond to ‘demand for money’. which is a possibility.” “H“We must closely monitor these variables, so that all these new pesos do not eventually increase the gap or put a floor on inflation.”he suggested.
Source: Ambito
