Regarding the economic announcements of the second part of the program, Daniel Artanachief economist of the Latin American Economic Research Foundation (FIEL)said the Government “accelerated the transfer of debt from the BCRA to the Treasury” and thanks to this measure, the Central “gains space to make monetary policy”, in the framework of the presentation of a report on the regulation of the financial sector. The specialist said that since the passive repos are not under the jurisdiction of the BCRA, if the monetary authority raises the rate, it is not automatically reflected in higher interest payments to the banks.
But this was a negative signal for the market: “Now I can raise your interest rate“Believe me,” Artana said. “But it goes unnoticed,” he added. And the reaction of investors the following Monday was not the best: sovereign bonds fell and Country risk rose above 1,500 basis points.
What will the accounting reflect regarding the debt that was transferred to the Treasury?
Artana distrusted the possibility of having “zero emissions” and explained the intricacies of the transfer of the debt from the BCRA to the Treasury, which means that the accrued interest is not reflected in the deficit. “Part of the Treasury’s debt issue is done with discounted Treasury Bills, not reflecting the interests in the fiscal deficit“, stressed the chief economist of FIEL, and continued: “When the control is done and the variation of the debt has to be equal to the deficit, adjusted by valuation it does not give you”.
“In fiscala signal was quickly given to permanence of the marked course, with more structural measures than what could be seen in December. But, in terms of would change You are practically in the same place as after the devaluation. The long-term objective in fiscal matters is to have fiscal balance or surplus and in exchange matters to remove the restrictions,” said Artana and added that the Government paid the political cost in fiscal matters, but seems not to want to pay it in terms of exchange rate.
About him stocks In particular, Artana analyzed that The government does not trust the price that society can put on the dollar and, therefore, does not remove the restrictions on access to foreign currency. “It is a conceptual error to say that there are no dollars. They do not trust the price mechanism, there is an exchange rate level at which the supply and demand of dollars is balanced, what can happen is that this level does not resist you politically,” said the chief economist of FAITHFUL.
In this regard, he assured that last Friday’s announcement would have been more satisfactory if “some easing of restrictions was announced,” such as the possibility of removing restrictions on dividends and imports, which do not currently represent a large expense for the Central Bank, since, for example, the large import debt was settled with the BOPREAL.
Meanwhile, on multiple exchange rates, such as the dollar blend -80% official scheme and 20% CCL for agricultural settlements- he said that there is a perceived exhaustion. For Artana, the way out of this scheme would be, as the former Minister of Economy suggested, Sunday Cavallois that he takes the official at the level of blend and of the Importer dollar (official, plus COUNTRY tax), This would lead to unification without major price shocks. “The problem is unifying the prices tariff increases and of fuelswhich were not planned in the official schedule. So, unification has a problem,” said the economist.
With respect to stocks which falls on individuals, Artana said that he would eliminate it at the end of the entire process of lifting restrictions, since in his opinion it is “It is macroeconomically irrelevant“.
Economic activity, wages and inflation
In a brief review of economic activity, the economist acknowledged: “I was very positive when I said that the recovery was going to be ‘V’ shaped and he disassociated the FIEL group from this projection on activity. However, he acknowledged that slight signs of recovery are beginning to be seen and exemplified with the Monthly Estimator of Economic Activity (EMAE), In May, the figure was the same as in the previous month according to the seasonally adjusted series; activity also registered a smaller decline, according to measurements by private consulting firms.
He also highlighted the real improvement of wages and retirements of the last month, although he acknowledged that the loss due to inflation was large; at the same time he highlighted the growth of credit, which generated a rebound in the sale of household appliances. In contrast, he said that cement shipments and car production continue to be in the red.
Regarding June inflation, he indicated that FAITHFUL gave “a little over 6%” and that “contamination” will be observed due to the rise in the exchange rate.
Source: Ambito
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