The former vice minister of Economy Emanuel Álvarez Agis raised a series of preconditions so that Argentina can leave the exchange rate and conjectured that There would be a window of opportunity to do so towards the last quarter of the year.
“The preconditions to get out of the stocks are to have many reserves, few pesos and the advanced exchange rate”indicated Álvarez Agis during a webinar organized by MEGAQM.
The economist explained that “With few pesos, you won’t go out and buy dollars, if you have dollars you have something to bank with, and if the exchange rate is depreciated, buying dollars is expensive.”
However, the current head of the PxQ consulting firm warned that the measure entails risks and considered that delaying it could complicate the situation, while understanding that “a window of opportunity may open” before the last quarter of the year.
“If I am guided by (Javier) Milei’s interview with Bloomberg, he said that he will be released from the stocks on February 29,” referring to the conditions that are needed so that the decision does not have a negative result.
“The implicit answer is February 29, because it set a series of conditions that will not pass in the coming months,” he explained, while maintaining: “If we accelerate the speed of liquefaction we can get out of the trap sooner, if you get reservations you can also get out sooner, but if you let time pass you will need more liquefaction.”
At the same time, he considered it essential for the release of the stocks to normalize the payment of imports.
“The first issue to solve is the normal payment of imports. It could begin to normalize with the liquidation of the harvest, but for producers the current price of soybeans is not spectacular,” he said. And he added: “I cannot imagine an exit from the stocks that has not had a normalization of the current account, a normalization of how we pay for imports.
Along these lines, he maintained that, according to his estimates, the agricultural sector will liquidate less than 80% of the value of the harvest, which may be insufficient for the monetary and exchange scheme proposed by the Government.
In a complimentary tone but including a criticism, Álvarez Agis praised the performance of the minister, Luis Caputo: “He is making a self-criticism in management. What did Macri do? Nothing fiscal, exchange rate shock on day one with liberalization. Caputo learned. Every prosecutor , nothing changeable”.
Source: Ambito
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