Domingo Horse ruled on the dollar and what can cause a release of the US currency. The economist assured that removing the stocks could cause a major inflationary collision. Given this vision, the former Minister of Economy recommended to the candidates to succeed Alberto Fernandez Be cautious with your proposals.
The specialist and former official expressed himself about the ideas commented on by some leaders who aspire to occupy the presidency as of December 10: “Opposition candidates must be very cautious with their proposals and initial actions to avoid the trap that will be activated, especially due to the existence of the exchange trap”argument.
“If, in order to avoid the inflationary inertia created by the exchange rate, the new government decides to eliminate it immediately for all types of transactions, without there having been time to implement a fiscal adjustment, The result can be a hyperinflationary explosion, extremely costly from a social point of view and devastating from a political point of view.” added on his personal blog.
Domingo Cavallo gave some advice on how the next government could do to begin to alleviate inflation: “If the next administration decides adjust fiscal accounts through reform of the State, privatizations and the opening of the economy to eliminate the exchange rate of the commercial market, “said the former head of the Palacio de Hacienda.
«If, instead of doing it with this methodology, you decide to immediately eliminate the exchange rate with the illusion of producing the fiscal adjustment resorting to a strong devaluation that liquefies debts, salaries and retirementsin the style of the January 2002 adjustment, you will not find any monetary regime capable of defeating inflation in a presidential term”, he declared.
