President Javier Milei He spoke again about his idea of coin competition in one of his speeches during the European tour. Furthermore, he insisted on the idea that the monetary policy scheme he promotes includes the closure of the Central Bank.
The head of state spoke at the Real Casino in Madrid on Friday in a ceremony in which he was awarded by the Juan de Mariana Institute. In a one-hour message, Milei reiterated what was the economic inheritance that she received, what were the first measures and what would be the next steps in economic management, which he interspersed with considerations of economic theory.
In a passage in which he spoke about the upcoming monetary plan, the president referred again to the “endogenous” dollarization schemewhich would imply a kind of currency competition in which the dollar has the upper hand at the expense of the peso. In that sense, Milei placed the start of the next monetary scheme at the moment in which it operates the lifting of exchange controls.
On this level, the president anticipated that he will first seek a reform of the financial system to make it “anti-running” with a rescue scheme that does not depend at any time on the Central Bank. “Closed the fiscal tap, closed the financial tap, closed the external tap, because the exchange rate is going to be free, we are going to go not only to a system of free currency competition, but rather, we are going to declare monetary issuance a crime against humanity,” he said.
Regarding dollarization, he stated: “As the amount of pesos is fixed, and to the extent that individuals need to monetize, they will bring their own currencies and make transactions in the currencies they want. And if you notice, that is going to mean that the peso has increasingly less of a role or importance in the number of transactions that are made, and There will come a time when it will be so small that we will close the Central Bank”, he anticipated.
Javier Milei insists on the closure of the Central Bank: what the IMF says
The president’s postulates are far from the opinions expressed by the technical team of the International Monetary Fund (IMF) in its last report. The IMF’s vision becomes important when considering that the Government seeks additional financial support from the organization as a step to eliminate the exchange rate.
The IMF’s idea of currency competition is less disruptive than what Milei lets us know. “While key fundamentals are being developed, eventual ‘currency competition’ within the regime could leave it resembling the managed float system that prevails today in Peru and Uruguay,” the technicians mentioned. In recent decades, these two countries had two-monetary economic systems that allowed them to consistently lower inflation. Neither nation completely dollarized its economy, but it did allow the use of the North American currency for savings and exchange.
“Price stability will continue to be a primary objective of the Central Bank, in a context in which individuals are free to save and carry out transactions in the currencies they choose,” the IMF anticipated. Regarding the limitations that the BCRA would have in the face of such a scheme, the technicians listed: “The Central Bank would be prohibited from providing financing to the government and would continue to refrain from transferring benefits to the Treasury.”
It would also “maintain its functions as lender of last resort for eligible (solvent) financial institutions, continue to sterilize foreign currency purchases, and manage liquidity over time through open market operations with government securities. In addition, accounting practices would continue to be perfected so that the BCRA balance sheet reflects the fair value,” the Fund stated.
With information from Infobae
Javier Milei in Europe: the meeting with the German Chancellor
Milei met this Sunday with the head of the German Government, the social democrat Olaf Scholzwho received it in Berlin.
The president arrived at the German Chancellery at noon in Berlin, 7 in the morning in Argentina, for a brief meeting in the presence of both delegations, scheduled to last approximately one hour, after the military honors and the conference had been cancelled. of press initially planned.
The visit to Germany considers an important step in Milei’s European tour due to the relevance of Germany in the European Union, the International Monetary Fund (IMF) and the Paris Club, among other organizations.
The meeting with Scholz is the first official Milei has had with a Social Democratic head of government since he became president six months ago.
