2024-09-01 06:50:35
Argentine President Javier Milei announced this Saturday a new monetary policy that will be applied from Monday and will consist of moving towards zero currency emission in order to achieve the revaluation of the peso.
“We are going to make pesos very scarce”he said in an interview with LN+. “From now on, the monetary base in Argentina will not grow any more. This is textbook,” he argued. The peso will be “very scarce” to avoid a devaluation.
“We turned off the tap on the issuance and purchase of dollars. Due to the regulations of the foreign exchange market in the MULC (Single and Free Exchange Market) we have to buy, we buy dollars, we inject pesos and what we are going to do is sterilize those pesos by placing dollars in the market and thus we ensure that the amount of money remains constant,” he explained.
“The dollar is rising but the government is still buying foreign currency”which will lead to a strengthening of the country’s reserves. In addition, “financially the country is very comfortable”, so the end of the exchange rate restriction is “getting closer and closer”.
Milei has acknowledged that These measures will cause “difficult” moments. “There will be difficult months in the exchange market because that is when The winter is getting harsher and we are spending more dollars on energy“We will have to put up with fluctuations for sure,” he warned.
The truth
In response, former president and opposition leader Cristina Fernández has called for “telling the truth” about what is happening with dollars. “Stop driving your followers crazy and tell them the truth: that you are going to use the reserves of the Central Bank of the Republic of Argentina to intervene in the market”has appealed.
“Do you remember, President, when I told you on December 10th at your inauguration that you had too many prejudices and that when you sat down in Rivadavia, they would disappear one by one? Well… Welcome to Argentina”has argued on social media after Milei’s announcement.
“He now realizes that no matter how big a fiscal surplus he has (even if it is fake and unsustainable) The central problem of Argentina and its bimonetary economy, with hyper-indebtedness in hard currency, is the shortage of dollars,” he stressed.
Fernández de Kirchner has reiterated the proposal to call for a major multi-party agreement that will allow us to overcome the “chronic bimonetarism” of the economy.
“Don’t waste any more time organizing Billiken events about squaring the circleconsider that you have been elected for four years and you have the opportunity to call upon the different political forces and social sectors to seriously discuss the destiny of our country. Even if they don’t give you the Nobel Prize, it is worth trying… and history will surely recognize it,” he said.