The Minister of Economy gave an extensive interview in which he made several important statements, related to the dollar, the exchange rate restrictions, inflation and tariffs, among other issues. He also spoke about the negotiations with the IMF.
The Minister of Economy, Luis Caputo, He provided new definitions on monetary policy, in which he elaborated on what will happen when progress is made in the coin competitionan idea that definitively displaced the concept of dollarization. He also spoke about the relationship between the peso and the dollar and ruled out a sudden devaluation.
“In the currency competition, the peso will be strengthened by a shortage problem”said the Minister of Economy, in an extensive interview in which he gave several important definitions, linked to the dollar, the exchange rate restriction, inflation and tariffs, among other issues. He also spoke about the negotiations with the IMF.
Elaborating on currency competition and the relationship between the peso and the dollar, Caputo said: “The broad monetary base is the total supply of pesos, the total liabilities of the BCRA. And on the other hand, you have the common monetary base, which is the money in circulation plus the reserves. It is, in a way, the demand for money, the pesos that you want to have in your pocket. When there is a lot of inflation and when the rate is very high, you don’t want to have a single peso because it loses its value.”
The demand for money is collapsing. It is a bit like the scenario that existed before. Now, we are in a situation in which the demand for pesos is recovering. We want to see the monetary base rise. If you had 1,000 pesos in your pocket before, now you will want to have 10,000. Those pesos that you have now, the BCRA no longer has to withdraw them from the market and pay for them, that is, it is not an issue. The rise of the base is positive, not negative,” he said on Radio Mitre.
News in development.-
Source: Ambito
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