MercoPress. South Atlantic News Agency
Macri tries to calm down Argentines as US dollar goes up
Argentine President Mauricio Macri Tuesday said Argentines should “not worry about the dollar,” as the US currency rose 13 cents, closing at AR$ 17.18. It will “benefit regional economies and job creation,” he added during a radio interview. Read full article
Comments
Disclaimer & comment rulesRelax. The dollar isn't going up.
Jul 05th, 2017 - 03:34 am - Link - Report abuse +2The ARS is going down.
Like a modern-day Nero, president Macri keeps fiddling and asks the people to listen to his music as the first flames begin popping up in the horizon.
Jul 05th, 2017 - 06:25 am - Link - Report abuse -3I believe TF stated that the rate needs to be slightly over 22 per dollar, so this seems a move in the right direction. Meanwhile Kamerad/Komrade Rique fiddles on as his dream of a reinstatement of a Narcokleptocracy with a wide open flow of meth precursors to Mexico for processing and smuggling of Meth into the US seems to be going up in flames. Bummer, eh, Kamerad/Komrade?
Jul 05th, 2017 - 07:45 am - Link - Report abuse +2http://i1290.photobucket.com/albums/b521/imoyaro/KameradR_zps5h5sc4uu.jpg
According to the FT the peso has fallen due to fears of CFK staging a comeback in the midterm elections.
Jul 05th, 2017 - 09:19 am - Link - Report abuse +1It's not necessarily a bad thing though as it's still overvalued thanks to all Macri's borrowing.
DT is correct in this case: market analysts have responded to the possibility that Kirchnerism could again negatively impact Argentina's international financial relationships, even though that is unlikely. However, Kirchnerism isn't the only flavour of Argentine populism and the market perception also considers that the present government's trade improvements may not be long-lasting and could be reversed by a future populist government, which we know is always just around the corner. Thus the long, dark shadow of peronismo continues to negatively affect the country and is largely responsible for Argentina being regarded as a high-risk “frontier market” case rather than a comparatively more stable “emerging market” condition (placing it in the same class as Bangladesh), although some of the risk-raters had varying opinions. MSCI seems to have provided the decisive opinion. Even though the present national debt ratio (debt:GNP) isn't particularly high, CFK's mere candidacy is enough to ensure that Argentine investment positions will be in the “junk” category for the foreseeable future. Argentina is correctly being viewed as unstable and high-risk. No surprises there.
Jul 05th, 2017 - 01:44 pm - Link - Report abuse +2The dollar:peso? The ARS has been vastly overvalued for a long time and observations concerning continued deficit spending called for some risk assessment. An adjustment is no surprise but it's not so much the result of recent loans but rather a lack of productivity. The country continues the trend to spend more than it produces - deficit in May: 27 billion pesos; in April, 19 billion, with a significant trade deficit as well).
Not surprisingly, ML comes up with the notion that anything bad happening to Argentina was, is or will be Cristina's fault. Not the effect of the actions of the government of the last year and a half.
Jul 05th, 2017 - 06:06 pm - Link - Report abuse -4In addition, ML blames current problems on “not so much the effect of recent loans but rather a lack of productivity,” which is of course jargon for “lazy workers.”
Appalling.
Reekie has consistently shown his lack of understanding of economic matters and this new cup of spittle is no exception. He probably is not even aware of the curse of low productivity that has long existed in this country, and obviously doesn't understand its causes.
Jul 05th, 2017 - 10:40 pm - Link - Report abuse +2Argentina's own government and its more serious consultants have identified many of the reasons that the country's industries are not competitive.
Argentina's instability and elevated inflation, along with high levels of taxation and chronic corruption, coupled with a lack of agility in its management and production planning models, have kept much of the industry here responding to short-term horizons and failing to look very far ahead. Look inside many domestic industries here and you'll see models that look more 1950 than 2017. Loaded labour rates are the highest in the region and labour activism is essentially hostile to employers, so much so that businesses are understandably reluctant to take on new workers. The labour environment in Argentina has created a belief that workers are entitled to perpetually high levels of compensation even when there is no longer a competitive market for their goods and services.
Years of near-feudal protectionist policies have kept much of Argentina from having to compete, isolating the country's would-be producers from the need to examine efficiencies and undertake modernisation. Those protectionist measures ironically kept out the very imports that were needed to allow industry to become more productive.
When you express the gross domestic product of countries in terms of normalised purchasing power per worker, Argentina comes out well below Chile, below Mexico, below Uruguay, below Bulgaria, and in fact it's about tied with the productivity rates of Ecuador.
If Reekie wants to believe that low productivity in Argentina is the fault of lazy workers, fine. He doubtless has more experience in that particular handicap than the rest of us.
Idiot child Enrique Massot (aptly named Reekie) is unable to understand, that the Argentine peso is vastly overrated.
Jul 05th, 2017 - 11:28 pm - Link - Report abuse +3After many years of high inflation during the Cristina Kirchnerista regime and with the resulting further inflation when the present government corrected some of the most outrageous financial mistakes committed under the “Model”, la cotización (exchange rate) should be somewhere between 21:1 to 23:1 and not as low as 17:1. The far too low exchange rate prevents industria Argentina from exporting industrial products, something the idiot child Enreekie, who lives as far away from Argentina as is possible in the Americas, cannot comprehend.
I'd believe the Financial Times before Enrique.
Jul 06th, 2017 - 01:39 am - Link - Report abuse +2Enrique seems to believe there is always an endless supply of other people's money that should be “re-distributed” er, 'appropriated'.
Related article in the argie media today showing how the long-standing self-destructive economic policies of the country continue to keep its goods and services non-competitive: for a new car produced in Argentina, nearly 55 percent of the cost to produce and sell that vehicle is due to taxes, while for a vehicle produced in Brazil the rate is about 13 percent. You'd think that the ever-popular Toyota Hilux camioneta built in Argentina would be just naturally sold in neighbouring Chile. Not anymore. Those vehicles are now non-competitive in Chile, where their distributor currently imports them from Thailand for a much lower net cost.
Jul 06th, 2017 - 03:05 am - Link - Report abuse +3Can't Argentina reduce taxes? Not really. The low productivity of the country is causing dangerous and increasing levels of deficit spending, which is one of the reasons that the peso is being devalued (and will likely go through more devaluation soon). Cut spending? Not likely. We've already seen the rioting that results from trying to reduce subsidies, social plans that promote excessive irresponsible breeding, an enormous bureaucracy, and the atrocious burden of overcompensated nonessential public employees.
That leaves ... incentives for increasing productivity.
Not gonna happen here. If anything, we're likely to see penalties for increasing productivity.
ARS just reported as 17.4 to the dollar. That's going to make it harder to pay off those dollar loans.
Well...finally ML appears to believe the Argentine economy is in trouble. We just don't agree on the causes. The relevant fact is, one year and a half of neo-liberal recipes is inexorably walking the country to a new collapse.
Jul 06th, 2017 - 03:35 pm - Link - Report abuse -3Millions of dollars entered the country lured by high interest rates, but they are ready to fly at the first sign of alarm.
Meanwhile, DA doesn't want to hear that all isn't well. He's going to fall from high but I won't be happy by the suffering a new disaster caused by a group of rapacious CEOs who came into power just to create good deals for themselves, family and friends is going to cause to the population.
Idiot child Enrique Massot (aptly named Reekie) who lives as far away from Argentina as is possible in the Americas, thus has no knowledge of the real state of Argentina and Argentine economy as opposed to those of us who live in the country.
Jul 06th, 2017 - 05:04 pm - Link - Report abuse +2Idiot child Enrique Massot is unable to understand, that so many years of mismanagement of the national finances under the so-called “Model” takes time to unravel.
Idiot child Enrique Massot keeps blabbering about national economy on the level, his education as a bark chewer enables him to misunderstand.
@SJ
Jul 06th, 2017 - 09:46 pm - Link - Report abuse -2Apparently, this poster believes that showing his good education levels adds credibility to his argument.
As I usually said in similar cases, throwing a tantrum shows more about the author than about the recipient.
IF SJ really lives in Argentina and has some green bank notes under his mattress I understand he's happy right now and doesn't want to hear criticisms of the good government that grants him a tidy markup in a few days--same with Don Alberto, who wishes for the greenback to reach 21 or even 23 ARG.
Well: I happen to remember what happens in my home country when the green stampedes. Guess what: In an economy tied to the green, local prices go nowhere but up--big time.
“Relax,” tells us “maestro ciruela” Marti. “The dollar is not going up but the ARG is going down.”
We are soooo relieved.
But back to SJ, who is still faithful and willing to give Macri more time... how long?
We don't know.
News flash to SJ. Not everyone will show such a complacent attitude.
In just over three months, Macri faces his mid-term test.
Two years later he goes to his “final.”
He'd better start improving things soon or risks being handed a pink slip in 2019.
Enreekie still doesn't understand that it is impossible to restore the Argentine national economy in less than two years after so many years of Kirchnerist mismanagement.
Jul 06th, 2017 - 11:06 pm - Link - Report abuse +2I give up. Reekie is simply too imbecile to understand even the simplest rules of national economy, although the poor tonto receives advice from educated people. Perhaps the problem is that the low temperatures in his forced exile cools all of his four brain cells to below 32F.
@EM
Jul 06th, 2017 - 11:09 pm - Link - Report abuse +3If you don't believe the FT that the recent devaluation is due to fears over CFK's candidacy, what do you think has caused it?
Asking reekie for explanations of economic phenomena is like asking Idi Amin for advice on proper governance.
Jul 06th, 2017 - 11:58 pm - Link - Report abuse +3The real reason for habitual economic failure in Argentina is because the country is full of argentines.
@DT
Jul 07th, 2017 - 12:49 am - Link - Report abuse -4Several causes are mentioned that include Brazil's economic direction and Argentina's failure to be upgraded to the “emergent market” category by the MSCI and be instead kept as a “frontier” type economy.
Other causes mentioned are delays by producers to cash in the soy harvest and the “electoral stress” caused by CFK's candidacy. (Unlikely since even if elected CFK will be a senator).
However, the most likely cause appears to be a decision of the Central Bank to stop supporting the peso as it had been doing until now. The action may very well be a devaluation “by omission.”
In any event, when you have an economy supported by foreign loans paying high rates of interest, a slowing down of the domestic economy coupled with wide opening of imports, there is not much room for good things to happen to the large majority of the population and for the small and medium size enterprises.
However, banks and financial institutions, large corporations such as the Macri group and middle men are making a killing. Pure joy, as they say.
@ML
When something that appears good is on the news, ML praises Macri and blames CFK.
On the other hand, when things are looking bad, he blames the Argentines.
Slimy opportunism at work.
Marti Llazo does not praise Macri and nearly two years ago predicted that his government was up against such opposition and inertia that any real turnaround of the failed K regime was improbable. Reekie's capacity for invention is large; his honesty absent; his understanding of economies tiny.
Jul 07th, 2017 - 04:25 am - Link - Report abuse +3That argentine culture fails to support the conditions to make the country competitive and productive, to pays its bills, has not changed. Nor is it likely to change.
@EM
Jul 07th, 2017 - 10:01 am - Link - Report abuse +2“Argentina's failure to be upgraded to the “emergent market” category by the MSCI and be instead kept as a “frontier” type economy.”
Ah, that makes a lot of sense because it limits investment in Argentine companies, and traders would have been buying pesos in anticipation of it going ahead.
The point about CFK is not so much that she is standing herself, but what happens if more of her allies are elected than Macri's.
According to the MSCI: “Although the Argentine equity market meets most of the accessibility criteria for Emerging Markets, the irreversibility of the relatively recent changes still remains to be assessed.”
The foreign currency restrictions brought in by CFK were the original reason for the downgrade, and the MSCI want to be sure similar policies will not be returning before upgrading Argentina's market.
But if the central bank really was supporting the peso (how?) then I think that was a mistake. A cheaper peso would not only make Argentine exports more competitive and increase tourism, but will also make these imports you are complaining about more expensive, which should help the domestic manufacturers.
Reekie wrote: “In any event, when you have an economy supported by foreign loans paying high rates of interest, a slowing down of the domestic economy coupled with wide opening of imports,”
Jul 07th, 2017 - 11:54 am - Link - Report abuse +2Jeez, can't you see what nonsensense this is? or can't you remember from one posting to the next?
When the dollar is expensive, does that encourage imports, wide open or not?
Why is the domestic economy slowing down? because the Argentines won't pay for their own products, they buy cheap Chinese articles.
How successful was the Kirchnerist “Model”?
2014.02: Kicillof denies link between devaluation and price rises as official February monthly inflation revealed at 3.4% (this is probably where Reekie has received his education in national economy)
2014.03.21: February trade surplus falls 92% compared to February 2013
2014.03.23: Global Competitiveness Ranking rank Argentina 104th among 148 countries. The trend is alarming: Argentina was 70th in 2006-2007 and 87th in 2010-2011
@DT
Jul 07th, 2017 - 01:38 pm - Link - Report abuse -4The Argentina Central Bank supports the peso by selling dollars from reserve funds in the marketplace.
The latest news is that, after doing nothing for a while, the government asked the public banks (Nación, Ciudad and Buenos Aires Provincia) to sell dollars, which pushed it down two cents to ARG 17.38.
However, it's thought volatility will continue until the election.
You are right; it's not the real power Cristina may acquire as senator if voted in, but the more general test of support of the population for the government what effects the market mood.
It's true that a cheaper peso helps exporters (harvested soy liquidations increased as the dollar went up) but many components of Argentina's manufacturing are imported, and that's one of the reasons any increase of the greens is followed by domestic price increases.
The overall picture is that the Argentine economy has been supported by an influx of capital attracted by high interest rates--but these capitals are ready to take flight at the slightest alarm, hence the fragility of the whole scheme. This has already happened, for example after Mexico abruptly devaluated its peso in 1994, which caused a stampede of capitals to S.E. Asia in what became known as the “efecto tequila” crisis.
reekie: “...Central Bank supports the peso by selling dollars from reserve funds...”
Jul 07th, 2017 - 02:18 pm - Link - Report abuse +4Unstable third-world countries with flimsy economies, low productivity, massive inflation, egomaniacal management, and frangible currencies have to do this to give their façade pesos the appearance of some sort of value. A country whose economy is not based on reliable, productive output of goods and services is a sham. It doesn't matter which party is decorating the Pink House in this country, because the culture cannot and will not support effective monetary and economic practices and instead relies upon cycles of bluster, circus, entropy, and failure, in what has come to be known as the “efecto defaulto.”
@EM
Jul 07th, 2017 - 03:03 pm - Link - Report abuse 0I guess they weren't doing that back when Macri abandoned the dollar peg, but it still seems that gradually moving to a lower rate once things calmed down might have been helpful.
Needing imported components is a common problem, it might have been better if the previous government had focused on subsidising industries that used Argentine raw materials, but it's too late for that now. I hope there were no import tariffs on those components at least?
Anyway, although it was a disaster in the short term, abandoning the dollar peg allowed the economy to grow strongly, so shoring it up seems like the wrong strategy to me.
@Marti
Countries like Switzerland and Singapore? Or the UK during our brief but disastrous membership of the ERM?
2017.07.07:
Jul 07th, 2017 - 04:11 pm - Link - Report abuse +3Reekie tries his hand at dismissing the advantages of a high exchange rate, like 17:1 or higher: ”It's true that a cheaper peso helps exporters (harvested soy liquidations increased as the dollar went up) but many components of Argentina's manufacturing are imported,”
Which percentage?
100% ?
50% ?
30% ?
30% ?
Not only is the expensive dollar an incentive to produce in Argentina, because it enables competition against imported articles, but it also increases indústri Argentina's competivity in Mercosur and on the world market in general.
Reekie hates this, because he doesn't live in Argentina, hasn't stayed here for a prolonged period (if at all) for more than 30 years and prefers the Venezuelan Maduro Model.
@DA
Jul 08th, 2017 - 03:17 am - Link - Report abuse -4Don Alberto claims to live in Argentina, which I now doubt very much. If he did he would know the effects of a climbing dollar every Argentine is familiar with.
When the dollar goes up, mi estimado señor Alberto, prices in Argentina go up. It's just a fact of life. A few days ago, for example, fuel prices went up significantly--perhaps you also want me to tell you by how much? Seven per cent for gasoline and six per cent for diesel.
On top of that, the government has agreed with the industry to adjust the fuels prices according to the dollar, which anticipates a new increase now with a higher dollar rate. Guess what happens when fuels prices go up?
What happens in a food-producing country like Argentina is that a higher dollar encourages corporations to export a higher percentage of their production and sell less domestically--another factor pushing local prices up!
Candidly, Don Alberto preaches the “advantages of a high exchange rate, like 17:1 or higher.”
What a difference two days make Don A. In one of his first postings in this thread, you were a bit more audacious:
”...la cotización (exchange rate) should be somewhere between 21:1 to 23:1 and not as low as 17:1,” Don Alberto noted.
Probably a friend of family member told Don Alberto what a catastrophe would be for the country to reach such rates in a short period (it may indeed happen).
So which is the rate you will advocate, Don A, for the benefit of the country as a whole?
Perhaps you are one of those who benefit with higher rates--if you live in Argentina, that is--and you can tell us why you like a higher dollar.
Come on, we are all ears.
Just to show how little idiot child Enrique Massot (aptly named Reekie) understands of what he reads
Jul 08th, 2017 - 01:29 pm - Link - Report abuse +2Candidly, Don Alberto preaches the “advantages of a high exchange rate, like 17:1 or higher.”
What a difference two days make Don A. In one of his first postings in this thread, you were a bit more audacious:
”...la cotización (exchange rate) should be somewhere between 21:1 to 23:1 and not as low as 17:1,” Don Alberto noted.
Where is the difference in my two statements?
“17:1 or higher” vs. “between 21:1 to 23:1 and not as low as 17:1”
Idiot child Reekie, which is the higher number, 17, 21 or 23?
The extreme inflation caused by 12 years of Kirchnerist mismanagement of Argentina's national economy dictates an exchange rate as high as 23:1
Macri's choice was to change fast and very painfully or over several years dragging the pain out. He chose the former.
Of course an idiot child like Reekie is unable to understand such simple facts of life.
Whether or not an idiot child doubts if I live in Argentina or not is of no consequence to a human being.
Local media:
Jul 08th, 2017 - 02:41 pm - Link - Report abuse +2“[former Central Bank president José Luis Machinea] .... argued that the depreciation was necessary despite the increase in inflation that it would bring because Argentina’s exports were suffering from what [Machinea] considered to be an overvalued peso.”
Overvalued peso.
Sort of reminds us of that old story about the best business you can get into here: buy an argento for what he's really worth and sell him for what he thinks he's worth.
@Don A
Jul 08th, 2017 - 02:48 pm - Link - Report abuse -3Ah, the unlimited power of insult in lieu of argument!
Of corse, Don A gets all worked out to be caught in a contradiction and skips rational discussion.
Fact is, one day Don A finds 17:1 “low” and two days later he finds it acceptable.
But enough of Don A.
I was hoping to appraise those who a few days ago rejoiced with the announcement of Julio de Vido going to jail.
Now, the judge has quashed the prosecution 's request and ordered the prosecutor investigated for procedural irregularities.
And so another hope for dutiful proof that Kirchnerists are, as Marti likes to say, a band of “corrupt thieves and hoodlums” goes to the dogs as soon as the matter comes to the courts.
And a big pre-election splash for Macri and Co. is laid to rest.
Who's going to save us from big bad wolf CFK now?
We see once again evidence of the infinite capacity of the argentines to keep their worst criminals out of prison.
Jul 08th, 2017 - 03:09 pm - Link - Report abuse +2Idiot child Reekie expects to be treated as a human when he writes: “Fact is, one day Don A finds 17:1 “low” and two days later he finds it acceptable.”
Jul 08th, 2017 - 04:05 pm - Link - Report abuse +2If you tell us which part of
“17:1 or higher” vs. “between 21:1 to 23:1 and not as low as 17:1”
you don't understand, we shall try our best to explain it.
Is it “not as low” or is it “or higher” that gives you trouble? or just the word “not”?
Enrique crows,
Jul 08th, 2017 - 05:08 pm - Link - Report abuse +3“...Now, the judge has quashed the prosecution 's request and ordered the prosecutor investigated for procedural irregularities.”
Isn't that contrary to your assertions that the Judges and Judiciary are all in Macri's back pocket?
Kanye, anyone who expects logic in one of Reekie's post is sure to be sorely disappointed.
Jul 08th, 2017 - 05:20 pm - Link - Report abuse +2I call Reekie an idiot child, because he *is* an idiot child.
The poor an idiot child thinks it is an insult. Au contraire, it's a precise description of his mental abilities.
@K
Jul 09th, 2017 - 06:14 am - Link - Report abuse -2The Argentine judiciary has everything in it--to use what I may have said is a cheap shot and you know it, Kanye.
It shouldn't be so difficult to understand that there's significant manipulation of process by a large section of the judiciary.
For example, the case of Macri's intelligence head Gustavo Arribas, who was accused of receiving bribes from Odebretch, was dismissed before receiving crucial evidence from Brazil.
In the Julio de Vido case, the prosecutor requested de Vido's detention without even questioning him. The judge, unless ready to violate the most elemental principle of justice, had no choice but to reject the prosecutor's request.
So, either you are to comment on the fact or you just take what I may have said to make a point.
Rather weak, Kanye. I know you can do better than that.
The unwillingness of Argentina to put its worst offenders in prison is further evidence that this is a country of, by, and for corruption and criminality.
Jul 09th, 2017 - 02:59 pm - Link - Report abuse +1It´s a catch 22 situation right now:
Jul 10th, 2017 - 05:50 pm - Link - Report abuse 0This guy is stating what should have been told a couple of years ago.
http://www.lanacion.com.ar/2041388-miguel-angel-broda-para-salir-de-la-decadencia-habra-que-esperar-al-proximo-gobierno
Or wait until the government after that one to turn around the decline. Or the government after the government after that one. Or maybe the government after the government after the government after that one.....
Jul 11th, 2017 - 03:45 am - Link - Report abuse +1TF
Jul 11th, 2017 - 06:38 am - Link - Report abuse -2Ah, the hypocrisy of the well-off...a whole bunch of double speak and empty talk.
Translation: ”Electors are suckers. But wait...there is another opportunity coming...vote for us in October and all will be fine...or perhaps after you vote for us in 2019...
@ML
Poor Marti...condemned to suffer daily contact with those inferior, corrupt people.
Come on, MP readers. Let's help Marti get out of there...perhaps he could apply for political asylum in a decent country and finally improve his bitter mood...
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!