Economists are Natalia Motilspoke with Canal E and highlighted Argentina’s economic scenario, warning that the government, characterized by a lack of foreign exchange reserves and mistrust of the peso, is “at a crossroads”.
Natalia Motil explained: “Argentina is a two-money economy; Requires significant reserves to surviveunfortunately we don’t have that today. it’s a big problem facing the government”.
What is the amount of hoarding in the private sector?
Similarly, he emphasized that: “In recent months, there has been an increase in the hoarding of dollars by the private sector. We’re talking about numbers in the $25 billion to $30 billion range.“The hoarding in just a few months is historic,” he said, adding it has “caused an exodus not only of imports and tourism but also of the private sector. it continues to save in dollars and in front of the government Unfortunately, these dollars cannot be accumulated”.
The big challenge for Motyl is to define “how to create a central bank.” Accumulate the needed dollar cushionas well as to be able to pay both the debt they carry, the capital maturities, and next year’s interest. Can continue to exert its firepower against any impact“In that sense, he argued that the government needs to decide between “releasing the exchange rate” and “reducing economic activity.”
The complexity of saving dollars
He then explained: “If a government wants to accumulate dollars through debt by issuing dollar-denominated bonds, the relative prices of traded and non-tradable goods become important.” Non-tradable items will increase. This makes exchange rate appreciation inevitable. This will lead to the resumption of economic activity.”.
On the other hand, the economist said, “If they decide to print pesos and buy dollars, then the pesos Continuous pressure occurs Depending on what happens to the exchange rate, there will inevitably be an increase in the exchange rate. It will affect the price later”.
He also thought that now “we are building an exchange peace.” on election issues“I will go again next year.” Volatility in the currency market”.
About The Author
