This strong rise made the exchange gap between the parallel dollar and the wholesale official exchange rate will exceed 80%which pulls the vicious circle of price inflationwarned the economist and former director of the Central Bank, Enrique Szewach.
“As the gap widens, the dollar rises and, as it is the currency of account, inflation increases because the prices are based on the price of the currency”he indicated in statements with CNN Radio.
WHAT IS THE VICIOUS CIRCLE THAT FEEDS WITH THE RISE OF THE BLUE DOLLAR?
In this scenario, Szewach analyzed the link between the local debt with the triggered inflation and the issuance of pesos, that as indicated on the latter, it only seeks to transform itself into goods or dollars.
“Argentina has a fiscal deficit without a capital market and without access to foreign debt, therefore the Central Bank finances that deficit by issuing pesos that nobody wants,” remarked the economist and former director of the Central Bank. “Then people try to transform it into goods or into dollars, and that increases prices because if it goes to foreign currency it deepens the stocks or increases the blue“, he pointed.
It is worth remembering that last week, at a time when the financial dollar was climbing after the liquidation of bonds and common investment funds CER, the Central Bank transferred an item to the Treasury for $108,000 million.
Source: Ambito
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