Continue with the devaluation of 1% or set a flotation band for the dollar, key to the IMF

The president signed this week the decree that enables the government to contract a new agreement of Facilities extended for 10 years With the International Monetary Fund.

The decree entered fully into a negotiation stage in Congress, where at least it must be approved by one of the cameras to be in force.

A new stage for which there are at least three key data of that understanding that are unknown:

In this context of relevant doubts and if one adheres to the statements of the President Javier Milei and the Minister of Economy Luis Caputo It is clear that what the official dome least wants is to devalue.

For weeks they have been repeating that a devaluation would only generate drop in income and impoverishment of the population and that, therefore, the possibility of a devaluation must be erased.

While the president’s political will is firm –“We are going to eliminate the stocks and the withholdings to the field forever,” He said in Expoagro on Friday-the operated ones closely follow the concrete viability of keep overweight For a very long period.

The fate of the Fund’s silver will be assigned, as Milei advanced, to reduce the liabilities of the Central Bank that are known as the market as the “Colored Papeos” that the National Treasury signed the central to get dollars and pay debts and commitments to the outside.

On that point there is a calculation of the Empiria consultant that ensures that “the FM silver to cancel with liquid dollars its debt with the BCRA (non -transferable letters that at the time were the counterpart of the use of reserves) will improve the quality of the central asset.”

Today the central has negative net reserves for US $ 4.3 billion and the non -transferable letters “They are at US $ 23,000 million (US $ 70,000 million nominal value). An alleged outlay of US $ 5,000 million would allow to rescue 22% of the stock of those letters and leave net reserves in slightly positive values”.

The point is relevant because operators of the financial market, in addition to paying attention to political definitions, maintain attention in two key variables: “net reservations” and the level of the exchange gap.

The gap between wholesale dollars and counting liquidation exceeded 15%, a fictional limit that supposes that the Central Bank must have had to increase its market intervention to contain the free exchange rate.

Back in July last year, the central allocated between US $ 100 and US $ 150 million to increase the offer in the CCL, but in December, January and February that intervention reached US $ 2,000 million.

Sustained demand for dollars in the free market by companies, importers, tourists for travel and purchasing tours abroad while pronouncing the increase in dollars of construction and a portion of family consumptions are some of the Exchange revaluation indicators that Argentina lives.

The countercara of that reality appeared in the week both in one of the most widespread opinions in Expoagro Regarding that the field does not ask for a devaluation, but that taxes are lowered, as in an exhibition of one of the most respected economists by Milei and the economic team.

Ricardo Arriazua fervent defender of the fixed and stable exchange rate to combat inflation, also insisted on the need for lower taxes to improve competitiveness although in exchange matters he opened a space of doubt by saying that both the IMF (which in his opinion does not understand the bimonary nature of the Argentine economy) and President Milei are Vaging supporters.

Everything indicates that, for now, the discussion about the level of the exchange rate is far from overcoming.

By Editor

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