President Javier Milei He once again aimed his criticism at those who maintain that the exchange rate is behind and considered it unfair “ask for a devaluation to liquidate salaries in dollars and thus increase poverty.
Hours before getting into the new Tango-01 to travel to the United States, the president once again questioned the economists who demand a devaluation, to whom called them “fundamentalists of the exchange rate delay”. Instead, he focused on the importance of making “structural reforms.”
“If Argentina has an overwhelming formal fiscal pressure, poor infrastructure and not very open markets that make competition difficult, which makes us expensive in dollars, does it seem fair to ask for devaluation to liquefy salaries in dollars and thus increase poverty? Perhaps? Wouldn’t it be better to go for structural reforms that allow us to be competitive without punishing real wages? Is it not enough for them with almost 90 years of an invalid prescription?“Milei said on the social network X.
And along those lines, he continued: “If there is no fiscal deficit, if the monetary base does not increase, if reserves increase and there is no gap Are we not facing a price adjustment due to the distortion of the past? Wouldn’t this manifest itself in high dollar prices? At the same time, I understand that the pricing system doesn’t fit them, but couldn’t it be that this is a driving force for an investment that allows us to gain competitiveness?”
Milei closed his message by leaving an enigmatic postscript about the exchange rate. “I’ll tell you about the stocks too.“he noted.
The claim of some economists, businessmen and producers about the exchange rate delay and the need for a devaluation infuriates Milei. The head of state has been posting to them on social networks for days. For the libertarian leader, according to Casa Rosada sources, those who ask for a devaluation “are ignorant people who do not understand that the solutions they propose are inflationary and only serve to impoverish people.”
To that circle, Milei repeats over and over again that “the only way to gain competitiveness is making structural reforms“.
The President had already defended the exchange rate this Friday with another message in X in which he warned that Argentina “is expensive in dollars given its fiscal and regulatory structure.”
Milei started that message by emphasizing that only a “coincidence” would allow the establishment of a vector of equilibrium prices, an essential condition for quantifying whether there is a deviation and what its magnitude is if it exists, to immediately list five pillars of his economic policy that influence the currency rate.
“1. Financial surplus in the treasury. 2. Constant monetary base. 3. Almost zero gap, with purchase of net reserves. 4. Sanitation of the BC balance sheet. 5. Lifting of restrictions in the exchange market every day until a day he finishes getting out of the trap,” Milei said.
The libertarian closed the tweet by rhetorically asking himself: “Are we facing a case of exchange rate appreciation or a case of rearrangement of relative prices where Argentina is expensive in dollars given its fiscal and regulatory structure?”
President Milei’s arguments about the reasons for the appreciation of the peso are in line with what the Minister of Economy, Luis Caputo, declared on Monday during a public interview held at the Stock Exchange.
The official warned that there are sectors where prices in dollars and pesos “were completely out of date,” since some businessmen “continue with the DNA of ‘this is Argentina’, at some point something has to happen.”
And about the pace of devaluation, Caputo said: “We are going to live with a more appreciated real exchange rate.” “Don’t wait any longer for the shock. This is what happens when you do your homework, the exchange rate appreciates,” he explained.
