Minister of Economy Luis Caputo defended the exchange rate bands system and the management of monetary policy, assuring that the system “gained credibility” after withstanding the financial tension prior to the legislative elections. In his participation in the officialist streaming “Las tres anclas”, Caputo explained the fundamentals of the recalibration of the exchange rate adjustment and the sequence of the government's economic program. The official sought to differentiate between the purchase of foreign currency and the accumulation of reserves. He explained that while the Government was the largest buyer of dollars in the market, the legacy of maturities forced to allocate most of those resources to paying commitments. “For every dollar we bought, 75% was used to pay debts,” he stated, pointing out that this dynamics was due to the lack of refinancing the country was facing. The minister highlighted that during President Javier Milei's administration, public debt was reduced by about 50,000 million dollars, an effort that now allows opening a new stage of accumulation. Caputo put emphasis on that the electoral result was key to validate the current strategy, and described a pre-electoral scenario in which the market became “unidirectional” towards the dollar. In that sense, he clarified that having left the bands system earlier would have shot the dollar up to $3,000, reinforcing the perception of risk. According to Caputo, the main novelty after the elections was the recovery of financing, which marks a turning point. He insisted that with the continuity of the fiscal anchor, Argentina will converge towards international inflation levels, which will eventually result in a crawl of less than 1% in the future. “Now, instead of accumulating 25 cents for every dollar, we will be able to accumulate the whole dollar,” he pointed out. He indicated that the Treasury will stop being the buyer of dollars to pay maturities, and that accumulation role will pass to the Central Bank, stressing that the timing of this change responds to a planned sequence: “The order of the factors alters the product”. Regarding the modification in the scheme for updating the exchange rate bands, Caputo clarified that there was no change in the value of the dollar, but an adjustment in the update mechanism: “The only thing that changed is that it went from a fixed crawl to a variable one”. While the variation was previously 1% monthly, it will now be adjusted to the latest inflation data. The minister explained that this flexibility does not imply a permanent increase in the adjustment rate, but a necessary adaptation.
