According to Javier Milei, no one can determine the vector of intertemporal general equilibrium prices from which the claim that the exchange rate is delayed derives. Furthermore, he considers it a mistake for economists to resort to averages as if there were a mean-reverting process, since according to him, the deep parameters do not change over time. He also questions the reference point that some economists take, pointing out that they usually start the series from the exit of convertibility, a period characterized by violations of property rights that lead to the systematic depreciation of the currency.
In this same vein, Milei indicates that during periods of wild populism, the real exchange rate is above average, while in moments of confidence, it is below. Regarding a possible devaluation, Milei explains that if it is considered that the money supply contracts due to fiscal surplus, the dollar would have no monetary fuel to rise, but rather the opposite.
Milei reiterated that there will be no devaluation of the exchange rate and criticized economists who continue to warn about a supposed exchange rate delay. In his opinion column in La Nación, Milei asserts that every time the real exchange rate begins to fall, economists start sounding alarms about an exchange rate delay without even considering the possibility of an appreciation of the peso.
Under the title "Exchange Rate Delay: The Broken Record of Economists," Milei argues that the method used by economists has serious methodological problems. He points out that more than 6% of the monetary base is being absorbed per month, while the demand for money is being recomposed and the economy is growing. He warns that in reality, pesos are running low as the months go by, which would prevent a rise in the dollar.
Consequently, Milei dismisses projections of devaluation and concludes his column with a strong criticism, stating that all devaluation bets by economists lack solid foundations and that the Government will not devalue to save face for its clients at the expense of the suffering of decent Argentines.
