Federico Furiase and Martín Vauthier see solidity in the exchange rate policy, due to the commitment to reducing the fiscal deficit and the deceleration of inflation.
Two of the figures closest to the Minister of Economy, Luis Caputo, assured that there is still room for the Argentine peso to continue appreciating against the dollar, and they ruled out both a devaluation and an exit from the stocks. in the short term. The officials highlighted the commitment to reducing the fiscal deficit as the main support for the solidity of the exchange rate policy.
“There is a connection between fiscal order and the real equilibrium exchange rate. For us, there is margin of appreciation,” said Federico Furiasedirector of the Central Bank (BCRA) and who knew how to be Caputo’s right-hand man at the consulting firm Anker. In the framework of an exhibition at the Torcuato Di Tella University, the economist maintained that the fiscal anchor, defended tooth and nail by President Javier Milei, explains the “symptoms of unforced appreciation.”
In that sense, he added that today The pace of adjustment of the official wholesale exchange rate, or “crawling peg”, is converging to the monthly inflation rate minus the US inflation rateso currently there would not be a problem of exchange delay like the one mentioned by many of his colleagues in the private sector.
Zero fiscal deficit, the workhorse of Milei’s economic team
In addition, Furiase asserted that zero issuance and the fiscal rule allowed the BCRA to buy US$20 billion and the Treasury to add close to $11 billion in the first year of management. In that framework, denied the possibility of a devaluation since, according to the view of Milei’s economic team, it is not the way for the Argentine economy to gain competitiveness and only causes a drop in salaries. (like the one that occurred in December 2023 during the mandate of this same president). In contrast, deregulations in foreign trade and tax matters are more appropriate paths, they explain, to promote sustained growth over time.
In the same vein, Martin Vauthierdirector of the Investment and Foreign Trade Bank (BICE) and also a leading part of Anker until last year, He highlighted the fact that Milei is the guarantor of the elimination of the fiscal deficit, “the reason for many of the crises that Argentina has had in its history”.
Regarding the exit from the stocks, The officials explained that it will happen gradually, and that for a definitive release of capital controls the BCRA must accumulate more reserves. “The objective is that, when it comes out, there is no tension and to avoid affecting this process of disinflation and growth,” Furiase elaborated on the matter.
Source: Ambito
