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Javier Milei and Cristina Kirchner are involved in an intense dispute on social media for the direction of the Argentine economy. This exchange added the participation by former Minister of Economy, Hernán Lacunza. The head of the consulting firm Empiria analyzed the dynamics shown the Central Bank reserves and the official exchange rate and agreed on one point with the former president.
“@CFKArgentina is right about one thing,” wrote Lacunza, in a post through his X account (ex-Twitter), where He insisted on the imbalance shown by the external sector and the risks of the economic scheme which the Government supports today.
“To normalize the exchange market, the level of stocks (reserves vs. liabilities in pesos) is not as important as the exchange rate that balances the flows.“, Lacunza explained about one of the axes of the debate between the former president and the current president.
“To normalize the exchange market, the level of stocks (reserves vs. liabilities in pesos) is not as important as the exchange rate that balances the flows,” wrote Lacunza.Ricardo Pristupluk
The approach of Lacunza warns that, beyond the level of reserves of the BCRA and liabilities (Leliq, passes or the monetary base), The destabilizing factor may be due to the external deficit that stimulates the current level of the dollar. It is an issue that Mauricio Macri’s former minister (2019) warned about on repeated occasions. While the Government focuses on achieving a reduction in inflation, holds the scheme of crawling peg at 2% per month for the official dollar, which in fact implies an exchange rate appreciation which ultimately impacts Argentina’s competitiveness and ability to generate dollars through exports.
“The restriction is not external, but internal: it is not that we do not generate dollars, but that we cannot retain them voluntarily (without restrictions) due to bad policies.“Lacunza added in his post, warning of the consequences generated by the exchange rate restrictions, which discourage exports and generate greater incentives for imports, with a greater demand for the official dollar that impacts the Central Bank’s reserves.
“The risk is getting used to those laurels, so to speak, entering a comfort zone and not moving forward with the reforms that are needed to lift the restriction, which must be done as soon as possible,” Lacunza had said in an interview with THE NATION, when analyzing the Government’s commitment to maintaining monthly devaluations of 2% and the persistence of exchange controls.Getting out of the trap is a necessary step to grow again“, he insisted.
The dispute between Cristina Kirchner and Javier Milei began today, after the publication of a document by the former vice president where she presented her views on the “bimonetary economy”, the problems with “the debt”, the dollar, money and the labor market. “Nine months after the arrival of the president to the government, First global anarcho-capitalist experienceonce again and as always, Reality prevails over extravagant theories, incendiary speeches and marketing phrases“, wrote the former vice president.
This statement generated responses and a series of taunts and provocations on social media. “Don’t be so nervous,” Milei wrote, adding that today she will give an “ad honorem class” to respond to the former president.
On this point, Lacunza also wrote: “Argentina is not the death of economic theories, but life: when we want to rewrite the books, we do badly.”
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Argentina’s Economic Quagmire: Javier Milei, Cristina Kirchner, and Hernán Lacunza Weigh In
Argentina’s economy has been plagued by challenges for decades, and the recent dispute between President Javier Milei and former President Cristina Kirchner on social media has brought the country’s economic woes back into the spotlight. The debate, which also features insights from former Minister of Economy Hernán Lacunza, highlights the pressing issues affecting Argentina’s economy, including the exchange rate, Central Bank reserves, and the country’s competitiveness.
The External Sector Imbalance
Lacunza, who heads the consulting firm Empiria, agrees with Kirchner on one crucial point: the imbalance shown by the external sector and the risks of the economic scheme supported by the government. He notes that the level of stocks (reserves vs. liabilities in pesos) is not as important as the exchange rate that balances the flows [[3]]. This sentiment is echoed in a report by the Atlantic Council, which states that Argentina’s economic challenges are a barrier to the country’s prosperity, and that a new drought has made things worse [[1]].
The Crawling Peg Scheme
The Argentine government’s scheme of a crawling peg at 2% per month for the official dollar implies an exchange rate appreciation, which ultimately impacts Argentina’s competitiveness and ability to generate dollars through exports [[3]]. Lacunza warns that the destabilizing factor may be due to the external deficit that stimulates the current level of the dollar, an issue he has repeatedly warned about in the past.
The Consequences of Exchange Rate Restrictions
Lacunza also highlights the consequences generated by the exchange rate restrictions, which discourage exports and generate greater incentives for imports, with a greater demand for the official dollar that impacts the Central Bank’s reserves. He emphasizes that the restriction is not external, but internal, and that Argentina cannot retain dollars voluntarily due to bad policies [[3]].
Getting Out of the Trap
The dispute between Kirchner and Milei has brought attention to the need for reforms to lift the restriction and grow again. Lacunza insists that getting out of the trap is a necessary step to grow again [[3]]. This sentiment is echoed in a report by the Council on Foreign Relations, which notes that Argentina has struggled with political dysfunction and financial crises for decades, and that the country needs sweeping fiscal consolidation to stop the perpetual cycle of excess borrowing, high and hyperinflation, default, and instability [[2]].
A Call to Action
The exchange between Milei, Kirchner, and Lacunza serves as a call to action for Argentina’s policymakers to address the country’s economic challenges. It is essential to implement reforms that promote competitiveness, encourage exports, and attract foreign investment. The country must also work towards reducing inflation, stabilizing the exchange rate, and promoting fiscal discipline.
Argentina’s economic woes are complex and deeply entrenched. The dispute between Milei, Kirchner, and Lacunza highlights the need for urgent reforms to address the country’s external sector imbalance, exchange rate restrictions, and lack of competitiveness. The time to act is now, and Argentina’s policymakers must work together to chart a course towards economic prosperity.
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Keyword Optimization:
Argentina’s economy
Javier Milei
Cristina Kirchner
Hernán Lacunza
Exchange rate
Central Bank reserves
Competitiveness
External sector imbalance
Crawling peg scheme
Exchange rate restrictions
* Economic reforms
What are the key points of dispute between Javier Milei and Cristina Kirchner regarding Argentina’s economic policies?
Intense Dispute between Javier Milei and Cristina Kirchner on Argentine Economy Direction
The Argentine economy has become a hot topic of debate on social media, with President Javier Milei and former President Cristina Kirchner engaging in an intense dispute over the country’s economic direction. The exchange also saw the participation of former Minister of Economy, Hernán Lacunza, who added his insights on the Central Bank reserves and the official exchange rate.
The dispute began when Cristina Kirchner published a document outlining her views on the “bimonetary economy,” debt, dollar, money, and labor market. She criticized the current government’s economic policies, stating that “Nine months after the arrival of the president to the government, first global anarcho-capitalist experience once again and as always, Reality prevails over extravagant theories, incendiary speeches, and marketing phrases” [[3]].
Milei responded to Kirchner’s statement, saying “Don’t be so nervous” and offering to give an “ad honorem class” to respond to the former president’s claims. Lacunza, meanwhile, agreed with Kirchner on one point: the imbalance shown by the external sector and the risks of the economic scheme supported by the government today [[1]].
Lacunza warned that the destabilizing factor may be due to the external deficit that stimulates the current level of the dollar, an issue he has repeatedly warned about in the past. He emphasized that the restriction is not external, but internal, and that Argentina cannot retain dollars voluntarily due to bad policies [[2]].
The former minister also noted that the government’s focus on achieving a reduction in inflation, while maintaining a scheme of crawling peg at 2% per month for the official dollar, ultimately impacts Argentina’s competitiveness and ability to generate dollars through exports. He cautioned that the risk is getting used to the current comfort zone and not moving forward with the reforms needed to lift the restriction, which must be done as soon as possible [[2]].
The dispute between Kirchner and Milei has sparked a series of taunts and provocations on social media, with Lacunza adding that Argentina is not the death of economic growth, but rather a necessary step to move forward with reforms.
the intense dispute between Javier Milei and Cristina Kirchner on the direction of the Argentine economy highlights the pressing need for economic reforms and a shift in economic policies to address the country’s competitiveness and ability to generate dollars. The involvement of Hernán Lacunza adds a layer of expertise to the debate, emphasizing the importance of addressing the external deficit and exchange rate restrictions.
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