The internal dispute with Sturzenegger, the request for funds from the IMF and the rise of the free dollar: 15 phrases from Luis Caputo

The Minister of Economy, Luis Caputogave a press conference where he focused on what he called “the second stage of the economic plan.”

Accompanied by the president of the Central Bank of the Argentine Republic, Santiago Bausili, said that there is no set date for the exit of the exchange rate, but that this instance will be reached if “certain economic parameters” are met. It will remain for a third stage, “which will be a stage of growth,” said the head of the Treasury Palace.

They also explained that the process of transforming remunerated liabilities of the Central Bank into Treasury debt will be accentuated, that the PAIS tax will be lowered “between August and September” and that a new devaluation is not in their plans.

• “The lifting of the restrictions is a third stage, which will be a stage of growth. We have not set a date, but rather macroeconomic parameters. We do not want to cause shocks to people, such as a potential rise in the dollar, which generates more inflation, unemployment and all the things that Argentines have already seen for a long time.”
• “We are going to lower the COUNTRY Tax, as we said from day one. It will be as soon as the Base Law is regulated and implemented and the Treasury begins to receive the income from the fiscal package. It will probably be between August and September.”
• “There is no devaluation project nor is it true that the Fund has requested that.”
• “What we believe is that it makes no sense to devalue. Argentina has to stop believing that this is the way to have a competitive economy. The way to be more competitive is to lower taxes. “There is a tremendous overload of taxes.”

• “We want to give greater certainty and solidity to the economic program so that in some way there is no longer any anxiety about when the exchange rate restrictions will be lifted. Some people will say that we fell in love with the restrictions, but that is not the case.”
• About Federico Sturzenegger: “Federico does a phenomenal job. Argentina is a tangle of obstacles. Far from worrying me, I welcome his arrival in the cabinet. What he does, he does better than anyone else.”
• “We are ensuring that we will enter a path in which there will be no risks in the exchange rate and we will be deepening the disinflation and at the same time, doing this, without the need to want to do an exit from the currency controls without making people run any risks. When the necessary macroeconomic conditions are met, we will make that move.”
• “It will be maintained crawling peg of 2% and 80/20 and there is no devaluation project nor is it true that the Fund has requested that.”
• The 2% will be maintained because the program we have designed initially included a higher initial devaluation to be able to anchor expectations with a crawling peg of 2%. This, together with the fiscal anchor and the negative real rate, is what generated a much faster disinflation process than expected.”
• “Most economists predicted inflation of 30% in December, 30% in January and 20% in February. Inflation always surprised, for the better. After [decían que] I couldn’t go below 10%, after 7%… today the differential is really low. We do not set a real exchange rate goal, because situations change. “The exchange rate today with these levels of exchange is not the same as with higher or lower levels of terms of trade.”
• “There are many factors that make the historical real exchange rate chart not really a very valid measure”
• “Our goal is that at the end of our mandate we have been able to reduce 90% of taxes. I am not referring to the tax burden, but to the amount of taxes.”
• “The best way to generate competitiveness is to lower taxes, inflation and the cost of capital (interest rate). That is the way we plan to gain competitiveness, achieving fiscal surplus and returning that surplus with lower taxes to the people.”
• “We decide on the tariff issue on a monthly basis because it is a matter of harmony between fiscal balance and people’s pockets. Any tariff measure is consistent with the goal of fiscal-financial balance.”
• “Getting rid of the restrictions would attract more investments. The RIGI will help a lot and getting rid of the restrictions would complement this.”