2023-12-05 01:31:00
In the run-up to the inauguration of Javier Mileythe future Minister of the Interior Guillermo Francos considered “reasonable” for the official exchange rate to oscillate between $600 y $650which would imply a devaluation in the spectrum of 65%-79% from the current $378, and sparked a debate among specialists.
“I would stay calm with the dollar. I don’t see a reason why there has to be a rally. When you see the history in recent years, It might be $600, $650, that would be a reasonable value.. I’m not saying that’s what it will be. I think that a reasonable value would be more or less that, making a projection of the cost of inflation and the value of the previous dollar,” said the former president of Banco Provincia in dialogue with Luis Majul by LN+.
They assure that “there will be no cuts in sensitive issues for the economy”
Doubts and caution among economists towards the dollar at $650
Consulted by PERFIL, the finance specialist Andrés Reschini assessed that if the real exchange rate is taken into consideration, the value proposed by Milei’s main political sword “It would be neither high nor low in historical termsbut in the current circumstances it would be appropriate to achieve a higher level through a dollar at $700 / $800.”
In his opinion, these figures would allow “optimizing the trade balance, improving the position of net international reserves, regularizing the debt for imports and facing sovereign debt payments.”
At the same time, Reschini predicted that “there would be more inflationary pressure” but stressed that the prevailing scheme until now “cannot be supported much longer since they took us to a level of negative net reserves in the order of USD -10.5 billion and serious supply problems with very high inflation.
Exploring this line of argument, the financial analyst differentiated a scenario of high inflation “during a period fixing imbalances” and a situation of skyrocketing prices “accumulating imbalances.”
For his part, the head of the Center for Political Economy (CEPA), Hernan Letcherbelieved that a dollar at $650 “would make all directly imported inputs more expensive and would generate greater inflationary pressure“.
In effect, the 22% exchange rate jump that occurred following the PASO accelerated price dynamics: from 6.3% in July to 12.4% in August and 12.7% in September, a high since early 1991.
From Letcher’s perspective, the adjustment to the pace that Francos introduced “would not have the effect of combining local prices with international prices because It is not very different from the value at which it is exported today“.
It should be noted that the Export Increase Program (PIE) is still in force and offers exporters the possibility of liquidating the 50% of their currencies in the Single and Free Exchange Market (MULC) and the 50% remaining to cash with settlement. From this percentage arises a quote of $615in the order of what was proposed by Milei’s reference.
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Meanwhile, the economist Roberto Cachanosky He stated that it is not so easy to see what level the dollar should be at.: “Yo I don’t know what a reasonable dollar price is.the dollar has a price like any other product in the economy. If we start pricing things reasonably, we’re toast.”
In this sense, Cachanosky stated that the next Minister of the Interior adjusted the exchange rate to the variation in inflation, a procedure used by economists to analyze the variable. “This does not imply that it is the price of this moment. In these conditions that we have today, a dollar at $650 would be very cheap”he explained on Channel E, postulating that various factors influence the value of the North American currency.
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In parallel, the financial analyst Carlos Maslatón fired thick ammunition once morest the statements of Guillermo Francos by emphasizing that “they perfectly express the wrong idea of a country that believes that the government issuing a currency can set the price of that currency in the market.
“Not even Milei’s ‘liberals’ dare to let the peso float, like all currencies in the world. Milei is transmitting through the horrible economic team that she names that she will not even allow the free operation of the exchange market from 12/11/2023,” judged the former friend of the leader of La Libertad Avanza on the social network X.
And he continued: “Are you going to buy everything that is sold to you and sell everything that is bought for $650? Without limits on quantities? Are you playing at being a bank with a fixed dollar-peso exchange rate? In other words, let’s say, Francs, are you? without rationing volumes? Look, if they don’t do it there is a barrani market. If you can’t, let them float“.
MFN / ED
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