Former Central Bank President Martín Redrado warned that “Today there are no dollars to pay the debt” which expires next year and warned that our country “is having difficulty adding reserves.” Although in May it was able to buy 16 billion, “it then stagnated,” he clarified.
He also indicated that for To maintain a currency appreciation process, dollars are needed, “that does not exist in Argentina” or “transformations” of the different productive structures.
“Lower taxes and generate more companies” and at the same time more people “within formal work” because “we cannot live” with “50% of informality,” the economist stressed in dialogue with Radio Rivadavia.
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“Today we are money laundering dependents and after September 30th we will be Trump dependents. We cannot live with a very short-term horizon.“For an economy to develop, we have to give predictability to the main Argentine variables, including the exchange rate to the value of the dollar,” Redrado added.
He also recalled that Argentina “has devalued its currency many times and that is not the solution” because “the key is to generate export and investment dollars,” but to do so, “fundamental transformations in the economy and in the tax and labor structure are needed,” he said.
“The government needs many more dollars than it has to maintain this exchange rate policy. This scheme guarantees a certain stability, but the exchange rate gap cannot be controlled. The date of September 30 is key to knowing how many dollars could be transparent in the Argentine economy and, from there, the evolution of the exchange rate gap and the reduction of the country risk,” he added.
In another part of the interview, he pointed out that “we are facing a short-sighted and non-integral economy” and that “more genuine dollars” for export must be produced.
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Exit from the exchange rate trap
On the other hand, Redrado also referred to the cepo and stated that the Government “finds it very useful”; although they removed “some restrictions”, There does not seem to be “a clear path” and, therefore, the economy “sustained interest rates in pesos below the inflation rate.”
“The exchange rate restriction may guarantee a limited official exchange rate, but it does not allow for an economy with a growth perspective. In one month, 5 billion dollars of imports are needed for our productive sectors, machinery, inputs to produce and generate jobs. We are running on very few reserves,” concluded the economist.
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