Argentine Peso with trading band and zero growth monetary supply policy

Thursday, September 27th 2018 - 09:19 UTC

Full article 2 comments

The International Monetary Fund Managing Director Christine Lagarde, speaking at a news conference in New York alongside Argentine Economy Minister Nicolas Dujovne, said IMF was “significantly frontloading” disbursements under the program adding the Argentine central bank had agreed as part of the deal to allow the peso currency to float freely and would only intervene in the foreign exchange market in extreme circumstances. Read full article

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Capt Rockhopper
What could possibly go wrong?
Sep 27th, 2018 - 05:32 pm - Link - Report abuse +1
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Enrique Massot
Summarizing:

President Macri's main strategy has been to borrow abroad as much as he possibly could, with the money going mostly to keep the lights on - until investors thought Argentina had borrowed more than prudence allows, and abruptly stopped lending.

As soon as this happened, Macri ran to the IMF to keep borrowing. The money now being facilitated to Argentina will ensure the country makes its debt repayments in time - nothing else.

This means in the end Argentina will find itself owing to private investors plus to the IMF, and with its capacity to generate currency greatly reduced as the recessive effects of the measures imposed on Argentina bring its real economy to a stand still.

Argentines now begin to taste Macri's original plan, which is to shrink the economy and reduce the country's labour costs to third-world levels - this is when the chickens may come home to roost.
Sep 28th, 2018 - 11:25 pm - Link - Report abuse -2
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