Argentine Government discusses to change the exchange rate policy
Economy minister talked with other ministers about the actions to take with the exchange market. Currently there is no consensus on what actions to take. However, in case of reaching an agreement with the Paris Club and the IMF, the government won’t control it for much longer.
According to financial market actors, Juan Carlos Fabrega, president of the BCRA and Ricardo Echegaray, AFIP, are driving the liberalization of foreign exchange purchases, while Economy Minister Axel Kicillof believes that it’s not the time yet.
The dismantling of the stocks would eliminate the illegal market, when the gap with the official fell from 50 to 35 % after the devaluation in January and after some opening process.
While Kicillof days ago he met with referents of Economics and Cabinet, he gave no sign that implies a shift in exchange rate policy. However, he said that they would not provide new peso devaluation and the goal is to return to the managed floating scheme.
The government will have to strengthen fiscal positions and increase the level of reserves if wants to lift the measure. On the other hand, if Argentina decides to normalize its relationship with the Paris Club and IMF, they won’t keep the current scheme for many more months.