The government has compensated for doubts about the dollar with promises. The erosion of the presidential word could change the relations of forces.
In that game of permanent tensions that is the Argentine economy, mainly because of the dollara question emerges at this time as an unwanted effect of the $ Libra-Gate: to what extent does the word and commitment of the President Javier Milei Will effect continue to compensate for the imbalances offered by the economic model?
Synthetic, it is possible to think that the debates about the “sustainability” of the economic model have intensified in recent weeks. Since the IMF put conditions for a new agreement, different referents of the economic world They have raised not only their doubtsbut also their warnings. In that line, entrepreneurs have done the same and even a relatively aligned sector with the government such as the field, it has also exhibited its alarms
The question about the dollar and reservations
All these referents ask the same thing: how sustainable is a model that in order to maintain inflation in the area of 2% monthly decides to use all the dollars it has available for hold the exchange gap at minimum levels And thus compromise an attractive dollar rate for investors?
The question could lead to countless questions, where the question becomes other doubts, for example, to what extent this rate of exchange serves the real economy or how the government will do to lift the stocks without making changes in the price of the price of the dollar.
However, and, although there are numerous possibilities of analysis for the shortcomings that the economic path exhibits, The substantive issue is now to think about the immediate effect that a greater level of distrust could have in the intention, commitment and execution of certain government promises tied to different economic variables. The “we will not devalue” that the government exhibits as a Tibetan mantra could be assaulted by the skeptics.
El Carry Trade, a card castle
The “tabit” of the Minister Luis Toto Caputowho offers a real positive rate in exchange for “buying” its promise of devaluation to 1% monthly (while the country is more expensive in dollars and becomes less competitive in the future).
It seems little thing, but throughout the last weeks, the government has been compensating and mitigating the doubts of investors and the IMF itself with some statements and, therefore, it has put its credibility in the absence of specific elements (dollars ) To calm uncertainty.
Source: Ambito
