Under the title “Javier Milei’s next bet: take the belt to weight”authored by the journalist Ciara Nugent, the note considers that the exchange rate was a “key tool” in the government’s struggle against inflation. In this way, he warned that New exchange scheme can lead to greater challenges for politics and economy, on the eve of mid -term elections.
Financial Times warned by the electoral impact of Javier Milei’s measures
First, the disbursement of US $20,000 million from Argentinawith an initial disbursement of US $1,000 million, it is interpreted according to the outstanding British medium as a relief for pressure on the dollar exchange rate.
The article highlights that in the first week of flotation “the weight fell 6%, a decrease less than expected by economists.”
Meanwhile, the CEPO elimination announcement came at a time when the reserves were practically exhausted and had forced the BCRA to use dollars to defend the value of the weight, which increased the risk of a “destabilizing” devaluation, says Financial Times.
The influential British medium emphasizes that the decision surprised analysts, but Milei presented it as the fulfillment of his promise to “free the Argentines.”
In this way, for the British environment the main challenge is Maintain stabilityin Argentina “companies adjust their margins to protect themselves from inflation,” marks the note and warns that a slight rebound is now expected in the monthly inflation rate, which had already risen from 2.4% in February to 3.7% in March.
The media also underlines other factors that contributed to restore trust, such as the extension of the SWAP with China of US $ 5,000 million and the visit of the US Treasury Secretary, Scott Besent.
What did the Financial Times say about the agreement with the IMF
The British media consulted Cristián Buttiédirector of CB Consultor, who warned that the success of this strategy will depend on public perception.
“If we see more inflation, can the government maintain the feeling that things improve or a climate of doubt will arise?” The consultant asked. For a government that lives or dies of trust, he replied, that doubt prevails could have “uncontrollable consequences,” he added.
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What did the Financial Times say about the exit of the exchange rate
The newspaper also recalls Previous experiences of liberation of the stocks, as the end of the government of Mauricio Macri, which had to reinstall the exchange controls.
In this regard, former macro minister Nicolás Dujovne said: “Until a promised government is re -elected in Argentina, it will be difficult to resist political shocks.” The great challenge, he said, is to generate improvements that convince the population not to change course.
The electoral impact of Javier Milei’s measures
Likewise, Financial Times also analyzed the impact of the measures on the road that the Government will have for 2025 in the mid -term elections, that is, the consequences and challenges on the political level for Javier Milei.
The note recalls that the last months were complicated for the Milei government, with the $ Libra scandal in February and the failure of the attempt to appoint two judges by decree in the Supreme Court of Justice. Consequently, Milei’s popularity fell 51.8% in December to 46.1% in Marchespecially in poor sectors, beaten by austerity measures.
According to Sergio Berensztein, political analyst consulted in the note, The agreement with the IMF is an opportunity for Milei Relance.
The objective of the government, says Financial Times, is Expand the number of representatives in Congress To advance with its reform agenda, but the first electoral round in the province of Santa Fe was not successful and where the Mileista candidate was “a third distant.”
The note remarks that the first electoral test was not favorable to the Government in the province of Santa Fe, where the candidate of La Libertad Avanza was “a third distant.” In any case, the main challenge is to maintain the confidence of markets and society to sustain floating weight and control inflation.
Source: Ambito
