Economist Marcelo Capello pointed out that care must be taken with the amount of “Chachos” the government will issue. And he announced that inflation in the province could be higher than in the rest of the country.
12:15 | Wednesday June 26, 2024 | La Rioja, Argentina | Fenix Multiplatform
The government of La Rioja announced that starting in July the Debt Cancellation Bonuses (BOCADE) will begin to circulate.
That is why Fenix contacted the economist of Fundación Mediterránea, Marcelo Capello to find out what the impact will be like.
First of all, he pointed out that we should look at Argentine history and remember what happened when other provinces issued their bonds. The central problem is that too many bonds were issued in relation to the monetary base.
He argued that in La Rioja there could be two effects: a devaluation of the bond and/or a slightly higher inflation than in the rest of the country.
“It is not good for the provinces to issue their bonds, Argentina unified the currency decades ago,” he highlighted.
The economist added that “it is logical that at first they are conservative by emitting little.” However, he said the risks are not so much at the beginning but later, “where it seems to be working relatively well and they start to emit more and more, and that’s where the problems seem.”
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