In the midst of the Central Bank’s series of purchases, which it has been carrying out since December 7,912 million dollarsMinister Luis Caputo insisted this The goal of the Javier Milei administration is to implement thedollarization of the economy.
The official confirmed this last night in an interview with TN, where he announced that there will be a bonus of 70,000 dollars for pensioners with the lowest incomes. The evolution of inflation and the dollar, together with the negotiations with the Monetary Fund, were part of the menu of the interview conducted by Jonatan Viale.
“The goal is todollarize, we will do it when conditions are optimal”Caputo said, although he did not specify when that might happen. So far the Central Bank has purchased almost $8 billion, but reserves have only increased 20,920 million dollars 26,859 million dollars. In turn, net reserves fell from $11 billion to $6 billion, but remain negative.
The commitment to the IMF is to add 10 billion dollars of reserves for the end of the year. Although the accumulation trend is promising, especially in view of the liquidation of the harvest not yet begun, it must be taken into account that in the second half of the year foreign exchange earnings are limited and Central will definitely have to go out and sell.
Getting the Central Bank’s books in order is essential to dismantling the exchange rate trap. “We are seeing very strong fiscal and monetary control and this is starting to create expectations. The shares will be eliminated when we manage to clean up the Central Bank’s balance sheet and it’s happening much faster than anyone would have imagined. “We must take into account the fact that we have received a destroyed country.”
Yesterday Caputo did not provide details, but the speculation that the market is making is that if the accumulation of currencies continues, exchange rate unification could arrive as early as July.
“It is not our plan to devalue,” he stressed. The measures taken by Caputo result in an exchange rate adjustment of just 2% per month, well below inflation, which raises expectations that at some point there will be a new sharp jump in the official exchange rate. This is why he insists on ruling out a sudden correction.
The minister underlined that the government “is trying to lower inflation as strongly as possible” and that “it is falling more than expected”. While a few days ago he stated that the February record would be closer to 10% than 15%, this time he hinted He expects February inflation to be 15% “and by July we will be below 10%.”
“In the last quarter of this year we will start to see a recovery. The sooner we bring inflation down, the faster the recovery will be. To lower inflation we need to be as disciplined as possible,” she said.
“The president always said that it would be hard, that if we could get out of so many decades of disaster in two months, it would be easy. We are doing everything we can to make this transition the least burdensome, The alternative was hyperinflation.“the minister insisted.
The agreement with the IMF
Yesterday Caputo received the number two of the Monetary Fund, Gita Gopinath, at the Treasury Palace, with whom he began talking about a new agreement with the organization.
Until now, what the current government has agreed with the Fund has been to revive the agreement that fell apart during the government of Alberto Fernández and establish the objectives that the government will have to achieve to receive the expected disbursements.
Now the game is open for a new agreement. “The meeting (with the IMF) was very positive. We have a very direct dialogue, They put aside the possibility of a new agreement. We also studied alternatives and talked to them about the possibility of a new agreement to see if there is something better we can do for the Argentines,” Caputo said.
In this context, the official stressed that “there is very strong fiscal and monetary control that allows expectations to be anchored.” “Argentina is a country that has no credibility and credibility is the raw material for making economic policy. The adjustment is sustainable over time and we tighten the adjustment constraints in political spending. Each province must take charge of its own decisions. We have lowered spending by 5 points, the Provinces only need to lower spending by 1 point”, she explained.
Looking to the future, the official said he was optimistic and said he was hopeful signs of recovery” from 2025“If “things go more or less well” from this year “it will be tough.” “We will be much better sooner than you think. The effort that all Argentinians will make today will be worth it. You will be really surprised. In two years we are a different country“, considered.
Source: Clarin
