Three former economic ministersDomingo Cavallo, Nicolas Dujovny and Ricardo Lopez Murphy– Agreeing on the need for the government to define a clear exchange and monetary framework, strengthen the central bank’s reserves, and liberalize the exchange rate.
The three participated in a panel discussion at FIEL’s annual conference, where they presented different views on floating the dollar, despite a shared diagnosis of the risks of operating with insufficient reserves.
Domingo Cavallo warned:It is impossible to imagine that the economy is able to function well without reserves or with negative reserves as is the case now.He considered that controlling the exchange rate and restrictions on dollar transactions is “a very restrictive factor to ensure the sustainability of the stability plan.”
He also questioned the lack of support to keep the price within the ranges: “Who will believe the Minister of Economy who will guarantee the band’s ceiling if he does not have foreign currency to intervene with?“.
Cavallo stressed that getting rid of stockpiles should be a priority. He explained: “We are not in a position to think about a completely dollar system, but rather about a dual monetary system that operates without restrictions and allows the use of both the dollar and the peso.” He proposed “converting the peso into a convertible currency, not as a fixed exchange rate, but without exchange controls, so that it is possible to convert from the peso to the dollar and vice versa,” and supported the idea of declaring the dollar a legal currency.
“In this way the system will work well, as in Peru, where the monetary dual system works very well,” he said. In this way, it is highlighted “Even if Trump and Besant are behind us, the accumulation of reserves is inevitable.”He warned that the international climate was complex: “I hope that the Argentine government will not copy Trump’s economic policy, whatever its identity; it is discretionary and inappropriate for Argentina.”
Nicola DujovnyFor his part, he stated that the country needs an “effective and distinctive monetary and exchange system” and stressed this “It should float freely.”. In his vision, “this is the virtuous path to a sustainable system.” He argued that free float has now become a global norm, and noted that “Mexicans during Tequila also said that they were not ready to float, that they were special, that their DNA did not allow them to float…Today they are one of the countries Buoys“.
The former minister stressed that the key Reducing exchange rate fluctuations is “the accumulation of reserves, Like Uruguay or Peru, which float less,” she highlighted the need to remove capital controls.We have to be patient and trust this to the economic authorities “They face the same north,” he added.
In addition, he suggested that Congress should set by law limits on equity reinstatement: “We should take away the authority to regulate foreign assets and the Ministry of the Economy to reimpose capital controls, to institutionalize and stabilize the system.”
Ricardo Lopez Murphy They agreed that the accumulation of reserves is a prerequisite for stability. He said: “The idea that a person can walk around in the open without being afraid does not accord with common sense.”
He noted that the program with the International Monetary Fund had already suggested this direction: “It has been said Rebuild reserves at full speed in the coming yearsIn his opinion, “this path of financial surplus and recovery of reserves is impossible to avoid, whoever is in power.”
The former minister also described the international context that could be appropriate. He said: “The dollar is in the process of weakening due to the financial policy of the United States, and this will create an opportunity for countries like Argentina, which depend heavily on the dollar.” He concluded that if the country can rebuild reserves and maintain fiscal balance, “important opportunities will open” for investment and sustainable growth.
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