MercoPress. South Atlantic News Agency

Cavallo confirms exchange rate

Argentine “super” Economy Minister, Domingo Cavallo confirmed that Argentina will not abandon its exchange rate system based on a one peso-one dollar, which now has been effective for a decade.

During the launching of a book about his life, "A passion for creation", Mr. Cavallo said Argentina has sufficient foreign reserves to support the current system and rejected any devaluation of the Argentine peso. "In the future we might have a more compensated support with a basket of currencies including euros and yens, besides the dollar, so as to help boost Argentina's international competitiveness and trade with the rest of the world ", indicated Mr. Cavallo. In his book, a recollection of twenty interviews by economist reporter Juan Carlos de Pablo, Mr. Cavallo reveals that Mercosur should be limited to a free trade area instead of a customs union. Mr. Cavallo also announced that with the extraordinary powers granted by Congress the De la Rúa administration will proceed with the deregulation process began in the early nineties which launched the Argentine economy during the first years of the Menem administration. Cavallo's book coincides with the tenth anniversary of the convertibility system (one peso equivalent to one dollar) which stabilized the erratic Argentine currency and set the foundations for an inflation free economy.