Beyond the manuals, each country applies its own recipe to lower inflation. And that of Argentina is at least particular. This was expressed by the president of the Central Bank, Miguel Ángel Pesce, at the close of the monetary and banking sessions organized by the organization, who assured that “inflation decreases with growth” and that the country will get inflation down from current triple-digit levels to 60% next year.

It was the turn of Pesce to close the panel “Challenges and prospects for monetary policy”, after his colleagues from Peru, Bolivia and Paraguay illustrated the strategies that their respective countries have applied to face the inflationary shocks recent ones, especially those caused by the Covid crisis, which has generated the acceleration of prices globally.

Unlike previous speakers, the central banker dispensed with PowerPoint presentations and numbers and expressed in a short speech: Inflation is a multicausal phenomenon.. It mainly occurs due to a difference between supply and demand. In peripheral economies, with high labor supply, external financing restrictions and energy shortages, curtailing activity and postponing growth may prolong the inflationary scenario.”

According to the president of the Central, An economy like Argentina “doesn’t respond to traditional measures”that’s why the country is betting on a “gradual slowdown inflation that does not affect supply or demand to a greater extent”. “We see that inflation has started to slow down since July and we believe that it will reach 60% next year.

Against this backdrop, Pesce said the BCRA board is still at a standstill you have not reviewed your rate policy and has not decided whether there is room for a cut if inflation slows in November. “We’re going to see what the results of the inflation are, but we don’t have any plans yet to cut the rate.”

On the other hand, when requested by clarionPesce denied that the agency’s intervention in the peso debt market generates a disruptive scenario, like the one that occurred last July, but instead serves to provide a framework of stability for that market.

Note in Development