A former Lavagna official argued for the “soybean dollar” but warned of the late exchange rate

Federico Poli was the chief of staff of the Minister of Economy, Roberto Lavagna, and executive director for Argentina and Haiti at the Inter-American Development Bank (IDB) in Washington. Twenty years as a protagonist in the exit from the convertible, he believes that Sergio Massa prevented an “explosion”, but he warns that the situation remains “extremely fragile”.

– Is the “soybean dollar” and credit from organizations enough to stabilize the economy?

– When Massa took over the direction of the Ministry of Economy, Argentina was a plane that was sinking, a few meters from touching the ground. What we have seen is that it has changed direction and has stabilized minimally in an area of ​​immense turbulence. Massa is the best this coalition can give.

– How do you see the economy now?

– In a situation of extreme fragility, we enter a regime of high inflation with few reserves and this affects activity. The signals he has given go in the right direction, reaffirming the achievement of the objectives with the IMF. The accumulation of reserves is the great missing chapter.

– Because?

– Although the gap has narrowed slightly, it is still very large and the official exchange rate is lagging behind. Nothing has been announced yet. A devaluation could generate an inflationary flash. If you want to tackle the foreign exchange chapter, you need to do it with some minimal strengths.

– Is the government going towards devaluation?

– There is a great imbalance. There have been mini devaluations and the exchange rate has been corrected below inflation. The issue of exchange needs to be addressed at some point.

– Does the “soybean dollar” avoid devaluation?

– This is a sector devaluation, a realistic measure that has allowed for the release of liquidations and the accumulation of reserves. And that’s okay now, in the short term. So what we hope is that it will deepen.

– Will the measures cause a recession?

– The economy that Massa found is stagnant because it does not have enough dollars for industry, inflation consumes revenue and the delay in exchange rates means that exports are not liquidated. Many of the measures are recessive, but it was heading for a major explosion and uncontrolled devaluation. That scenario worked. Now the expectations are different.