The economist Joaquín Cottani He showed a warning for the government on buying reservations for the Central Bank. He said that “forcing more exchange delay does not close” and pointed out that the belief that if the reservations rise the dollar would increase is “a primitive concept.”
Cottani assumed as Vice Minister of Economy at the beginning of libertarian management, but left his position for differences on exchange policy. Today praises the Flexibility of the stocks and its fiscal policybut warns for the dynamics of reserves in the BCRA.
Cottani about reservations in the BCRA: “That doesn’t close”
“The government has managed to buy time. The exchange rate is not a situation that is going to last, although it can easily last to the elections, ”he said about the economic plan in progress after agreeing with the IMF. And he added:” What did not change is the problem of exchange delay. “
In an interview with Radio with you, The former official He said that “The government should be buying reservations”: “I support and congratulate the Government to have found a temporary output (of the stocks) without inflation, maintaining stability. I doubt that it is something that goes beyond the elections, and should be reviewed These policies for the most important, which is to accumulate reservations”He insisted.
The economist was critical of the band scheme without the BCRA buying dollars until the official change reaches his floor. According to Cottani, it is a mistake to maintain a non -intervention: “They are afraid that if they buy reservations, the market will believe that (the dollar) goes up. But it is a primitive concept. “
He added: “Buying reservations generates trust, reduces the risk and allows the expectation of the exchange rate to be maintained (…) will never go down to $ 1000. But forcing more exchange delay, then the chest current account deficit, less private capital entry does not close”He said.
In turn, he stated that an eventual purchase of reservations – which would imply issuance of pesos in the market – would not entail an uncontrolled rise in prices. “We must not be afraid of spiralizing inflation, because the government has its main asset: the fiscal discipline and the lack of issuance to finance the deficit,” he explained.
On repeated occasions, from the economic team they raised their intention to generate conditions for Argentines to turn the dollars saved “in the mattress.” “For that to happen, They have to give expectations that do not exist today (…) For that to happen, the government should be buying reservations. “
The dollar and elections
Cottani also talked about the exchange rate and said he does not see devaluation until the elections. “Given the exchange band and the roof that was placed, the current level of approximately $ 1200 It is consistent with expectations of $ 1500 from here to a year (…) but when it is perceived that the band is not credible, it will automatically correct and the exchange rate will jump, ”he projected.
He referred to that “Today there is no fear” Due to the presence of IMF dollars but reaffirmed that “if minimal reserves are not accumulated to comply with the agreement” a “modification” will be necessary
Source: Ambito
