The entire political arc and economic analysts mark as a nerve center to begin to get out of the crisis to negotiate with the IMF, which has brought political shocks within the ruling party. With the economy conditioned, the president of the Central Bank, Miguel Pesce, spoke of structural changes, dollar, the exchange gap and how the negotiation with the Fund continues.
Pesce participated in the 27th “Industrial Conference: Exporting Argentine Value”, of the Argentine Industrial Union (UIA) and, in this scenario, he maintained that the Central Bank participates in the negotiation with the international organization. “I will be a signatory of the letter of intent“he explained.
“Intensive work is being done to reach an agreement. We are not dealing with the IMF logic of the 1980s where the demands were recessive to generate a surplus in the trade balance. There is understanding about the problems of poverty that our country has and that any recessive process would bring serious social and political problems to our economy, “the official warned.
In his presentation, he added a somewhat unexpected praise to the IMF. “It was classic in the Fund’s programs ask countries to cause exchange rate jumps at the beginning of the programs, and that is not present in the negotiation that we are having, “he emphasized.
Then he said that “the Argentina always surprises“” This year we had predicted, and the budget that was presented to Congress in September said, that the economy would grow 7% this year and our estimates give more than 9%, “he was emboldened.
“This changes the axis of discussion that we had been having for the representativeness in terms of the product of the fiscal aggregates. And also for the effects on the collection. This is the discussion and we hope to reach a good result in that negotiation with the IMF, “he concluded in this regard.
Regarding the value of the dollar, Pesce he referred to the exchange gap more than 100% and assured that “someone is willing to form external assets paying $ 200 per dollar is something that I don’t know what rationality it has“.
“It is a type of change that does not keep rationality“He insisted. And he listed:” The official exchange market operates between 800 and 1,000 million dollars a day; the securities market against foreign currency operates 40-60 million dollars a day at most; and the illegal dollar does not operate or millions dollars a day “.
“So, the exchange rate is where 99% of the foreign exchange operations in our country are carried out,” he concluded.
The government imposed a stocks on tourist trips due to the shortage of dollars.
Pesce recalled that when he began his administration in the banking organization, he believed that the exchange rate “was not backward, that it allowed an appropriate trade and exchange balance.”
“At the time of inflationary acceleration, at the beginning of this year, we understood that we could collaborate changing the devaluation step to avoid inflationary acceleration. I believe that the evolution of the exchange rate this year fulfilled that role, “he continued.
And he said: “I can state our strategic vision, not the tactical vision; to the extent that the inflationary process allows it, we are going to change the devaluation step that we have had so far.”
“We are in a balance where on the one hand we have to look at the competitive exchange rate and, on the other side, the inflationary process. This is what we are going to do forward, “he estimated.
Two structural issues
According to Pesce, there are two issues that “they are not on the political agenda“and that they are the key to get ahead.” One is the increase in exports and the other the theme of the development of capital market and the financial system in our country. If we do not put these two issues on the political agenda, it will be very difficult to solve the remaining problems that our country has, “he said.
“Since the year ’53, Argentina has been colliding in its growth with the external restriction. We have repeatedly collided with that limit, but in recent times a special characteristic has been presented: there has been a sharp drop in our exports from 2011 onwards, “began his explanation.
Pesce argued then that Argentina has a tradition in managing its finances, especially external ones, “they do not give her prestige” and it has to support its balance of exchange and payments in international trade.
“We are hopeful in this regard, not only because of the growth in total exports this year, but also, from our point of view, the policy to increase exports and how to improve our trade balance has changed, from talking about substitution. of imports we are now talking about production location. I think it’s a better concept than the one we had a few decades ago, “he added.
Miguel Pesce during the 27th Industrial Conference of the UIA.
And he argued that they are needed “90 billion dollars of export to be able to put a long horizon “.
Regarding inflation, he assured that solving the problem of external restriction “will also contribute to solving another structural problem in Argentina, which is inflation.”
In contrast to the idea that foreign investment is needed to grow, in his view, “Argentina is a country that has a high capacity to save.”
“The Central Bank has sterilized, through the Leliq and the passes, 4.4 trillion pesos. We are talking about 44 billion dollars. The fixed terms of more than 20 million pesos this year have grown in the order of 60%, the total fixed terms in the order of 50% “, he listed.
And he continued_ “There is no doubt that this has to do with the external restriction, but there is a strong challenge that ours so that the capital market can transform that saving into productive investment and financing also for families.”
“What is happening in the capital market is encouraging, but I think it is not enough. It grew strongly this year, it grew last year in total financing and SMEs, but we must make an additional effort in this regard. If we do not succeed develop our capital markets, those 4.4 trillion pesos that the Central Bank has sterilized, it will be very difficult for the economy to digest them“he explained.