Economists are Eduardo Coria Rahozspoke to Canal E and analyzed the impact of the recent currency swap between Argentina and the United States, also highlighting its financial and geopolitical implications.
“Currency swap, Swap means exchangecoin exchange. I give you my currency, pesos, you give me your currency, dollars, we exchange currencies because we have a long-term commercial contract, geopolitical issues that concern us primarily with the use of currencies for commercial exchange purposes;” explained Eduardo Coria Lahoz.
swap function
Similarly, he explained: “For practical purposes, currency swaps are Works as if it were a conditional credit“This is a tool that countries use to overcome certain financial stress situations. And the same thing happened with China six or seven years ago when we signed the swap with China,” he recalled. The same thing is happening now with US swaps, which have very specific characteristics.“,” since the clause they are secret. “We don’t know how a China swap will work, and we’ll never know how a US swap will work.”
Rahoz pointed out that the purpose of the agreement is to show support to international creditors. “The purpose of this exchange is to show the remaining creditors that we have a big brother behind us.” What is he telling us, Mr. Security, please don’t interfere with him because I’m behind him.” he explained.
Impacts that affected the market
In that sense, he insisted that the announcement would have an immediate effect. “The mere announcement of these exchanges Market expectations begin to dwindle. A dollar that will obviously reach $3,000 after the election. Suddenly it started to go down and was already starting to move away from the upper bandHe emphasized that “the swap did its job. It did exactly that.” Stop those conducting speculative attacks on currencies”.
The economist then emphasized that the United States also benefited economically from this operation. “They sell the dollar at a high price, Then they went out to buy it back cheaply. In this operation, the North American government earned about $200 million”.
On the other hand, he highlighted the experience of the Argentine economic team in the market, saying: “All the Argentine economic ministers worked in the same company and were trained in the same company. They share the same code. They know how to pressure, scare, make noise or make a good impression in financial markets.”.
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