According to a recent report by Mediterranean Foundationnext summer would be “the ideal window of time” for the Government to advance along this line.
“Given next year’s legislative elections, the opportunity to surprise and remove restrictions from the exchange market has only one window and corresponds to this summer season,” said the work signed by economist Jorge Vasconcelos.
The author clarified that this would be a viable possibility in the event that the Government “be willing to contradict your own speech.”
“The mhuge exchange gap and the decrease in country risk They have not modified the official discourse regarding the fact that there is no defined time for leaving the stocks. This message is even reinforced by arguing that ‘you can grow with this type of exchange restrictions‘”, he noted at the beginning of the work.
“The most recent of the requirements for an eventual exit from the stocks would be lThe convergence of local inflation to international inflation, but the sustainability of the post-trapped scenario does not depend on a specific data, but on balanced variables of the external and fiscal sectors,” he added.
dollar exchange rate
The exit of the exchange rate is the most anticipated event by the market, while small restrictions are eliminated in the short term
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The report stated that “paradoxically, andhe backwater of recent weeks in exchange gap and country risk has reinforced the market’s perception of the continuity of the stocks, with a ROFEX in which the contracts for March 2025 of the official exchange rate are agreed at $1,168 pesos.
“But if the Government were willing to contradict its own speech, it could not anticipate it either. Given next year’s legislative elections, the opportunity to surprise and remove restrictions from the exchange market has only one window, and it corresponds to this summer season,” he added. .
With what dollars would you get out of the stocks?
Vasconcelos pointed out that, “in principle, “It should be a move executed under the umbrella of the IMF, but there are not many signs in that direction.”
The document specifies that “in the last ten wheels the Central Bank accumulated a purchasing balance in the official exchange segment of US$811 million (daily average of 81 million)”.
In this regard, he maintains that it is “a dynamic that clearly does not respond to improvements in foreign trade flows, but to the fact that laundering is operating as a kind of capital inflowto the extent that the increase in dollar deposits begins to be recycled through new credits in that currency, or through the subscription of Negotiable Obligations issued by local companies.”
The latest statements from the Government in relation to the stocks
Javier Milei stressed in recent days that “he is not going to set dates” to lift the stocks. Along the same lines, in an interview with the Financial Times, Luis Caputo agreed: “It seems childish to focus on whether these controls end in two, three, five or eight months. That doesn’t matter. Every time we go abroad, we always see investors in the real economy and, honestly, no one asks about exchange controls.”
During the exchange, Milei He announced that the main condition for lifting exchange restrictions is that the monthly inflation falls below 2.5%.
Another point he pointed out is that local banks must reduce your exposures to government bonds and use those resources to increase credit to companieswhich would help satisfy the accumulated demand for dollars in the market.
At the same time, he clarified that the lifting of the stocks It is not conditioned by negotiations with the International Monetary Fund (IMF)an organization to which Argentina owes US$43 billion. “We have already begun to lift some of the regulations that make up the controls, and we are doing it on our own”Milei stated.
“We have already begun to lift some of the regulations that make up the controls,” he highlighted and added: “If someone comes and gives us a lot of money, we will open them tomorrow. Now we work like it’s not going to happen… as if they had an extreme aversion to risk,” the president explained.
Along these lines, Caputo analyzed the possibility of starting new negotiations with the International Monetary Fund (IMF) about a loan package with “fresh cash” that allows the Government “increase net reserves and that would help lift controls.”
Source: Ambito
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