Ricardo Arriazu, a recognized economist and influential voice for Argentine President Javier Milei, offered a critical analysis of the future of the economic scheme and possible changes in the exchange rate regime within the framework of an agreement with the International Monetary Fund (IMF).
Arriazu expressed his concern about the possibility of establishing an exchange rate band that could generate uncertainty, although he ruled out a sudden devaluation. He criticized the idea of freeing the exchange rate in an unfavorable context like last year, arguing that it would have resulted in immediate hyperinflation due to the country's debt and negative net reserves at that time.
Regarding the agreement with the IMF, Arriazu anticipated a gradual lifting of the currency controls that would not cover all aspects of the economy. He expressed concern about the IMF's lack of understanding of the particularities of the Argentine economy and mentioned that some restrictions, such as those related to dividend remittances, will continue to be progressively enforced.
Concerning inflation, Arriazu labeled it as a structural problem stemming from price indexation and fiscal deficit. He highlighted the importance of cautiously managing the country's monetary duality, marked by the peso and the dollar, and emphasized that it is essential to stabilize both units of account to ensure economic stability.
Arriazu also spoke about the need for effective inflation control for the Argentine economy to recover growth and reduce poverty. Although he acknowledged the short-term negative impact of the economic adjustment, he was optimistic about a potential economic recovery in the second half of the year, while warning about the presence of possible unexpected events that could destabilize the local and global economy.
