With the recent approval of the Decree of Need and Urgency (DNU) that allowed the Executive to negotiate directly with the IMF, The market closely follows government signals on the future of the dollar and the exchange scheme.
“The economic policy will not change anything with the agreement with the fund. The fiscal balance will continue. There will be no news,” said of Paul in an interview with Radio Continental, reaffirming that the priority remains the fiscal order promoted by libertarian management.
In this sense, the economist insisted that the basis of the government’s economic plan is sustained in the premise of “there is no money”, together with the influence of key figures such as Federico Sturzenegger in the design of fiscal policies.
The dollar and the need for a floating exchange rate
Asked about the possibility of modifications in the exchange scheme after the agreement with the IMF, Paul emphasized the need to float the currency without official interventions that limit its price.
“For a floating exchange rate you do not need reservations because it is the private ones that determine the value of the dollar,” he explained. He also questioned the idea of implementing flotation bands, considering that they would only generate uncertainty in the market: “The administered flotation is a partial pregnancy. If a band is announced, people will discuss.”
The economist also emphasized the importance of lifting the exchange rate to improve Argentina’s credit rating and facilitating the arrival of international investors. “By improving the note, institutional investors can buy Argentine bonds. I do not say that they will come like crazy, but enough to improve the country risk and facilitate the renewal of public debt,” he concluded.
Fiscal balance and exchange market release
In summary, of Paul said that economic policy will continue in the same line after the agreement with the IMF, with the fiscal balance as a central axis. However, he warned that the government should advance in a floating exchange scheme without bands to consolidate exchange stability and attract investments.
The debate on the future of the dollar is still open, while the market awaits concrete definitions of the economic team on the course of the exchange rate and the eventual leaving of the stocks.
Source: Ambito
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