The Mediterranean Foundation evaluated the new Exchange belt scheme The law will come into force this Friday and warned that it is a “still transitional system” whose restrictions should be lifted if the goal is to achieve sustainable economic growth. This was highlighted in the report Peruvian currency model as a possible reference for Argentina.
According to the analysis, the changes to the exchange rate system are intended to achieve two central economic policy goals: On the one hand facilitate the purchase of dollars by the central bank on the market and on the other hand begin to leave the stagnation of activity behindeven at the price of accepting accelerated disinflation in the short term.
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A schema with structural boundaries
The company noted that while these immediate goals can be achieved, the current design presents obstacles that make it difficult to consolidate a growth path. The main point of criticism is this Indexing the upper limit of the exchange rate band to past inflationa mechanism that, they warned, complicates the formation of the Yield curve and limits the extension of the term for fixed-price transactions.
In addition, according to the study, there is a lack of definitions regarding Elimination of holdings for legal entitiesa factor seen as a key factor in reactivating investments and normalizing the functioning of the financial market.
The Peruvian Mirror
Given these limitations, the report said that some of the limitations could be gradually resolved with progress toward a formal bimonetary regimesimilar to the one that governs Peru. There, they emphasized, the currency exchange system is perceived as permanent and not as a transitional phase, which expands the decision-making horizon both at the financial level and in the real economy.
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In this sense, the Mediterranean Foundation emphasized the advisability of a system of managed exchange rate floatwhere the monetary policy interest rate plays a central role in forming inflation expectations. “A stable regime not only facilitates transactions but also allows greater volumes of savings and investments to be channeled,” they noted.
The report concludes that the challenge is not just to coexist with bimonetarism, but to implement this scheme functional for developmentWe turn it into a tool for growth rather than a problem to solve.
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