“Since the stocks opened, the Argentines bought $ 11.4 billion, and in net terms 9.4 billion. That explains the fall in the activity. The economic team did not expect such demand, they thought that the dollar was calm the people were going to forget to buy. But distrust is entrenched, ”he explained in a radio interview.
According to Arriazu, the official expectation that the exchange stability would calm the demand for currencies collided with the habit of savings in dollars of the Argentines and with an election year where the caution dominates the decisions.
Criticism of exchange policy
The specialist also questioned the scheme of Flotation administered between bandsof which he said to be an “former adept.” “They wanted such a big band and wait for it to fall at the lower level. I would have bought at $ 1150 everything they offer me. The idea was to destroy inflation, it did not occur. Then the seasonality of the bonus, tourism and the purchase of treasure dollars were added. There the dollar went up, and when the dollar goes up in Argentina, the offer goes down “he said.
Along the same lines, he criticized the decision of Disarm the Lefi and changing the rates scheme: “They believed that the 15.5 billion pesos from Lefi were going to public titles. Only five went there; the other ten went to liquidity and the interest rate collapsed just when the dollar rose. The hell unleashed there.”
“They have no alternative to contain the dollar”
Although the government has about US $25,000 million in liquid reserves “Not your own, said Arriazu,” and limited debt matches, the perception of markets is fragility.
“They have no other alternative because, if the dollar escapes, everything is over. But as there is distrust, that implies huge rates,” affirmed. He recalled that the next review of the agreement with the IMF will be in February and that the program contemplates the possibility of intervening in the upper band of the exchange rate, which the government finally confirmed after its sayings.
Arriazu stressed that distrust is also reflected in the country riskwhich is kept high despite the fact that Argentina is the only country in the region with twin surplus.
“The recurring question of foreign investors is: ‘Why will this time be different?’
Electoral scenario and perspectives
Regarding the future, the economist was blunt: if the government maintains a third in the legislative elections, it can sustain its current program. “In that case, it is most likely that after October the dollar calms down, the country risk and the government access the markets,” he projected.
In addition, he anticipated that by 2026 the economy could benefit from Energy infrastructure works, agricultural harvest and the price of lithiumalthough the great challenge is “how to get to October.”
For now, the official strategy is actively intervene in the market —With reservations, future operations and weight management – to contain the dollar to the mid -term elections.
“They say political scorons that support to the government predominates in young men, poor and with little education. They do not understand what Milei says, but are angry with the above and support him by the hope that inflation and poverty will fall down. If that turns around for an inflationary jump or fall in the activity, Chau Milei,” Arriazu concluded.
Source: Ambito
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