MercoPress. South Atlantic News Agency

US dollar not lagging, says Caputo

“With Javier Milei we have the best relationship that an Economy Minister has ever had with a President,” Caputo said

Argentina's Economy Minister Luis 'Toto' Caputo insisted Tuesday that the US dollar was not lagging against the peso and also mentioned that a new deal with the Monetary Fund (IMF) was just details away from being finalized. He made those remarks and negative results hit the local stock markets, and the country-risk index regained its upward trend following President Javier Milei's statements that a devaluation was not in sight and that the government did not intend to modify the current pensions law.

Caputo also noted that the world highlighted the Libertarian administration's economic achievements and denied any rift with Milei, although he admitted he had heard those rumors during the weekend. But “that is a lie and the opposite of what is happening,” he stressed. “With Javier Milei we have the best relationship that an Economy Minister has ever had with a President.”

He also foresaw January's Consumer Price Index (CPI) would stand at 2.3% once the National Institute of Statistics and Census (Indec) releases the official figures on Thursday, which will be “the lowest” since Milei took office in December of 2023.

“It is around what the market predicted, which based on expectations is in the order of 2.3%, and I think it should be around that, so it will be our lowest,” underlined Caputo, who also claimed that the Kirchnerite opposition was “desperate” to see the government crumble. “Kirchnerism has paid journalists who lie because they need the country to do badly,” he argued. “Nobody can deny that today the country is better.”

Regarding former President Cristina Fernández de Kirchner (CFK), Caputo admitted he did not pay “attention” to whatever she says. “Cristina wants to show that she knows about the economy” although the previous government bequeathed the current one “the most chaotic economic situation in history.”

Caputo also pointed out it was “necessary to fight against informal employment” and, to that end, “the labor reform is very important,” he explained.

In his view, “an understandable profit taking” was behind Tuesday's fall of stocks and bonds. “What happened in the market is that the payment of the January coupons was anticipated; many thought that this money was going to be reinvested and that this was going to generate a greater increase” but “in the last two-month period there was a very strong rise in bonds and stocks and now we are seeing some very understandable profit taking.”

“We travel around the world and there is nothing but recognition and praise. Nobel Prize winners come to Argentina, such as Thomas Sargent or Arthur Laffer, and all the comments are always praising,” Caputo insisted while claiming that those economists who question the Government are always the same ones, driven by “political interest” or others “who don't give a damn.”

The agreement with the IMF will be signed before May. “We have agreed on practically everything; the fine print is still pending,” he reckoned, admitting that the fresh funds from there will allow the exchange rate stocks to be lifted, Caputo foresaw.

The new deal means “new money but not new debt because that money will enter the Treasury to buy back debt from the Central Bank and recapitalize,” the minister explained. “What changes is the creditor; it changes intra-public sector debt for debt with the IMF,” which “is one of the three conditions we had set to be ready to get out of the exchange restrictions.”