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Luis Caputo’s two key signals for the markets


The official implied that at the moment there is no will accelerate the pace of increase in the official exchange rate, which is called “crawling peg” and will remain at 2% monthly after the December devaluation. Thus he contrasted the view of other analysts who suggest that the TC is “behind” in the face of inflation.

The minister considered, in a television interview, that the official dollar is high in historical terms: “Many economists make the mistake of making calculations taking into account the exchange rate of the last four years. But they were the worst years for Argentina and expectations were very bad,” he explained.

Parallel dollar: what role do they have in this strategy?

The key for the Economy Minister’s strategy to be maintained is that the gap between the official dollar and parallel dollars remains at low values ​​around 30-40%. With the free dollars around $1,100 and an official dollar at $880the exit from the exchange rate is closer than it was in December, the exchange market remains stable and allows it to continue with this pace of devaluation without a new jump that will once again accelerate the rise in prices.

However, he did not want to give dates for the departure of the exchange rate: “It is true that the IMF thinks it could be done in the middle of the year, but everything will depend on how the Central Bank’s consolidation process goes,” he added.

Inflation: the Government believes that the rise in prices has slowed down

To avoid the exchange rate jump before the harvest and maintain this scheme in the exchange market, inflation needs to go down. After the flash in December that marked 25.5% in the CPI and a decrease of 20.6% in January, Caputo estimated that February inflation will be “closer to 10% than 20%.”

An indication known yesterday seems to have given him the kick to think that this was possible. Wholesale inflation was at 18%, below the national index. However, the minister also anticipated that March and April will be “complex” months and that is mainly due to the increases that arrive that month: gasoline, transportation, energy and schools. A month that seasonally tends to be difficult, Another stage of price deregulation is added.

In it economic team They believe that by April inflation could return to single-digit levels. The recession and the liquefaction of salaries and pensions with increases below the price index will play their part.





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