The president of Central bank, Miguel Pescedefended on Tuesday, in Deputies, the inflationary projection estimated for 2023 in the order of 60%, rejecting “sudden changes in the exchange rate” and stressed that the way out of the financial crisis is growth.
Pesce was the most requested official by the opposition during the discussion of the Budget project, although at the beginning of his presentation there were only a few lawmakers who listened as the head of the monetary authority defended the economic forecasts established in the project presented by Serge Massa.
“We don’t expect external shock as we suffered in the first quarter of 2021 and 2022. No sudden changes in the exchange rate are expected, which is another factor that fuels inflation, “the official predicted, during his presentation before the House Budget Committee.
Speaking before the Budget Committee of the Chamber, Pesce explained that in a country with 36% poverty and 6.9% unemployment, the alternatives are the contraction of demand through recessionary processes, which in his opinion “have consequences in the social fabric. ”The other path is economic opening, which for Argentina“ is impossible to follow ”because it has no external financing.
“The road we have left is the path of growth“, said the president of the Central, who predicted a” slowdown “in inflation.” All the signals that are given by the external sector, the monetary sector and agreements with price makers inflation expectations should be lowered in the next few years, “he said.
When asking questions, Paola Oliveto has raised some inconsistencies in the liquidity status of the Central Bank, since since December 2019 the stock of Leliq increased by 825%more than 7 times, while the remunerated liability on the total of the Central Bank grew by 530%.
Faced with this questioning, the monetary authority explained, in the first place, that the Argentine economy has “the highest inflationary levels since 2019” and this has an effect on the savings of Argentines. “In this sense, he argued that if the Central Bank does not keep the interest rates you pay for the Leliq “there would be a collapse in savings of the Argentines and would go against the promotion of savings of the Argentines “.
In defense of these stocks, Pesce said “there is no reason” to compare these instruments with the monetary base. “What we have to compare is that there are savings from Argentines so that our country can grow,” she added.
And when asked about the means to deactivate these monetary liabilities, the official replied that this will happen when “the economy demands credit, the capital market demands financing and that money becomes investment.” “It is not something that will happen spontaneouslywe must develop our capital market “, he remarked to the deputies.
Pesce stressed, in this context, that if no progress is made in capital market expansion, these savings will run out. “run away” in the formation of foreign assets, as happened in 2018 and 2019. On this point, the official reiterated that there are 400 billion dollars of Argentines abroad. “This shows that we are unable to turn our savings into investments,” he admitted.
Faced with persistent claims about how much the Central Bank will pay for the “soybean dollar” incentive plan, the official said that the monetary authority “had no cost because the price difference was compensated with a coupon from the Treasure”.
He also went to the crossroads due to difficulties in accessing the trading system and noted that those who request access to the foreign exchange market for production reasons “have had access”. Therefore, he pointed out that Argentina has a record of importing inputs and a record of importing goods from capital, while acknowledging that the difficulties in the trade balance were related to the import of fuel, which caused three months of trade balance. negative.
Finally, Pesce was confident that next Friday the approval of the second revision of the International Monetary Fund and agreed goals. “This will involve the disbursement of the bonds we paid in September, which were over $ 2,000 million, so the use of the reserve that was set up in September will be offset against the Fund’s disbursement. International Monetary Fund “, he completed.
Source: Clarin
