The economic team made a move that surprised the market. While some focused on the danger of reserves, others claim that it is another step towards the end of the exchange rate restrictions.
After the first week of intervention in the CCL, The market began a period of uncertainty about what the next months of the Government will be like with difficult months in seasonal terms for the accumulation of reserves. With this new move by the economic team of Javier Mileithe city is wondering about the elimination of the exchange rate trap. One of the most consulted liberal economists analyzed the panorama and spoke of the official output dollar.
“Doubts are seen in the market. You had a very big improvement in bonds and now you have a break. What we are waiting for is to have a clearer vision, because until now we were thinking a lot that at this time of the year we were going to be leaving the cepo. It is not so clear that it will be a quick exit, it is rather slow,” he explained. Augustin Etchebarne in dialogue with A24.
The economist argued that He would have “lifted the trap on the first day”“I think we have to get out as quickly as possible, but we have to have a program. The trap has several legs: one is the exchange rate unification and freeing the exchange rate or dollarization, which is still not off the table“, He launched.
Dollar: what the economist recommended to Javier Milei
Faced with this proposal, which was one of the most promoted by Milei during the campaign, Etchebarne outlined the positive and negative aspects. “What is the advantage of explicit dollarization?? that you synchronize all expectations, you already know what the price is. Then You stop thinking in pesos and think in dollars, since Argentines have ten times more dollars than pesos. “You take the risk of devaluation out of the equation and all that’s left is transformations,” he said.
On the problems that may arise, he added that “Argentina is expensive in dollars and when this happens it is more difficult to startWhy does it look expensive in dollars? Because you have to make a lot of changes, but the changes will take years, so there is a short-term problem of what you do during those years.”
etchebarne33.PNG
How much would the dollar be if the exchange rate were to leave the cepo?
“If you start with a very high dollar, to give yourself time to make the changes, fine, but that is no longer the case now. They are going for a system that is without inflation, which is hard and will take time.but hopefully that will accelerate the transformation processes,” he analyzed.
Finally, he referred to the current price of the dollar, which has suffered strong increases in all the free options that have increased the gap with the official rate, which continues with daily micro-devaluations up to 2% monthly.
“It is clearly not very high, it depends on the official dollar. If you free that exchange rate, I don’t think it would be much further than where it is today, somewhere in the middle of $1,300 or something like that.“, he said about a possible exit from the cepo.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
