The index measured by the JP.Morgan bank fell 1.7% to 1,842 basis pointsclose to the lowest level since the beginning of last February, although it still remains at the highest levels among the world’s emerging economies.
Milei said Wednesday night on national television that he signed a decree that includes more than 300 measures whose objective is to deregulate the economy, which includes the elimination of laws on price controls and the promotion of industrial activity.
The economist assumed the Presidency less than two weeks ago with a platform that aims to drastically reduce the size of the State and attack a complex fiscal deficit, generating a shock days ago when he devalued the national currency by 54.2%.
Milei acknowledged this Thursday in radio statements that They are “unfriendly measures (…) but I warn you that more are coming, you will soon find out” through bills sent to extraordinary sessions of Congress to “redress the macroeconomic imbalances.”
I affirm that works to eliminate “380,000 regulations” since “the State became a machine of destruction.” “It may be that there are people who suffer from ‘Stockholm’ syndrome, they fall in love with the model that impoverished them (…) The republic is at risk with populism, not with freedom,” he said.
Congress must soon analyze the constitutionality of the decree, which is already in force due to its publication in the Official Gazette. The complex and controversial decree must be sent to a Legislative Bicameral Commission for its constitutionality analysis first, and once this instance is settled, it will only lose validity if it is rejected by both chambers of Congress.
Argentine stocks, bonds and dollar
The Buenos Aires stock market showed a leading index S&P Merval with a drop of 0.5%, against an intraday rise that exceeded 5%, while the sovereign debt advanced 2.9% on average, after reaching an initial climb of up to 4%.
The dollar also relaxed with the battery of measures, since in the dollar “counted with liquid” it operated below $940, while the blue yielded to $975.
The official wholesale dollar barely rose to $804.25, with the regulation of the Central Bank (BCRA), so the exchange gap was reduced to 22.5%, the narrowest since September 2019 when Argentina was governed by Mauricio Macri.
Milei proposed a “deregulation ‘shock'”Cohen titled in his report of the day. “These aim to deregulate markets and include repeals of several laws that establish price controls or favor specific sectors.”
“The decree presents modifications in the labor regime, in the customs code and in the civil and commercial code. On the other hand, it prepares the ground for the privatization of public companies, in particular Aerolíneas Argentinas”he added to explain the welcome provided by the markets.
Via the Ministry of Economy, Argentina took on debt the day before in favor of the Treasury for 2.96 trillion pesos in cash (about 3,689 million dollars), in a multimillion-dollar operation given the liquidity that prevails in the market as a result of a new policy current monetary policy, palpable with a total supply of 13.05 billion pesos.
Operators highlighted that The change in monetary strategy tends to benefit the BCRA since it begins to liquidate part of its assets with a recent historic devaluation and the cancellation of the controversial “Liquidity Letters” (Leliq), attributed to being another component of rampant inflation.
This Thursday, Argentina faces a maturity of 900 million dollars with the International Monetary Fund (IMF) to avoid defaulting within the framework of an agreement for 44 billion dollars.
Source: Ambito
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