The markets took a break this Friday. The blue dollar fell 60 pesos and ended at 1,220 pesos. The mep fell 2.7 percent to 1,201 pesos and the cash with settlement fell 2 percent to 1,230 pesos. These quotes had skyrocketed during the week and brought the blue closer to 1300. The government assured that there was no concern about the rise in financial dollars in recent days. At the same time, they promised the countryside that the reduction of withholdings will arrive.
President Javier Milei considered that “this is not a run because for that the Central Bank would have to be selling dollars and today it is buying.” In turn, he stated that “there are some who previously said that there was a problem of exchange delay and now they say that there is a run. “It is true that the value of the peso is depreciating but we have to look at what is happening.”
“The correct look to see is that in the market there was euphoria about the Bases Law and the impasse that arose in the Senate caused the price of bonds to fall and the country risk to rise. The exchange rate requires more interest rate,” he said. He added that “we are not worried because we are not going to give up the fiscal balance. We die with our boots on. Could it cause me a setback? Yeah”.
On the other hand, Milei explained that for there to be a currency run “there have to be pesos on the street” and clarified that today the monetary base is not broad enough for that to happen.
For the President of the Nation, there are two ways to interpret the rise of the dollar with the same analytical instrument. “From my point of view there is one that is good and one that is bad,” he said.
“There is a relationship between the interest rate and the exchange rate. When the rate is raised, the exchange rate falls. So many can say that we went crazy with the lowering of rates and now the exchange rate has jumped. That could be a reading, which from my point of view is incorrect,” she noted.
“It is not correct because all the movement that we are making of remunerated liabilities towards the Treasury has very important properties in monetary terms, because it reduces future inflation; Therefore, the pressure on price levels decreases and the dollar is another price,” he justified.
Milei insisted that what is happening with the dollar is the responsibility of those in the Senate because they do not pass the Base Law. “It is a law that Argentines need, it is so that there is more growth, more well-being, less poor, less destitute, but politicians seem to be more interested in breaking the fiscal balance and trying to make the government fail, than improving life of the Argentines,” he noted.
Withholdings
For his part, the president spoke at an agricultural complex event and promised exporters that times will come without withholdings. “This sector (in the countryside) is very important for the country,” he began.
“We are working to eliminate the stocks, when the bombs that the Kirchnerists left us are deactivated. There will be a free exchange rate, when the accounts begin to be recomposed, we are going to eliminate the Country Tax and we are going to eliminate withholdings so that the field is free,” he considered.
“We are fulfilling our campaign promises. Believe me, we are going to move forward and we are going to be free and the field is going to have a fundamental role,” he concluded.
