The future of the exchange rate scheme in Argentina could be influenced by the arrival of dollars from the agreement with the International Monetary Fund (IMF), which would align more with the government's expectations and those expressed by the economist Javier Milei. However, according to expert analysis, lifting the currency controls with exchange rate delays could trigger a significant devaluation that would be difficult to control without sufficient dollar reserves in the Central Bank.
Economist Sebastián Menescaldi points out that the Central Bank's rate of devaluation would be more conditioned by the possibility of lifting the currency controls than by inflation, due to the need for sufficient reserves to move towards a more flexible exchange rate. Although the President has mentioned the possibility of eliminating the crawling peg if inflation remains low, it is crucial to strengthen the reserves to take that step.
Analyst Juan Graña highlights the importance of strengthening international reserves to avoid greater exchange rate instability in the future. Currently, with a delayed dollar and negative net reserves, the accumulation of reserves by the Central Bank becomes fundamental to ensure economic stability.
Although President Milei has expressed his intention to lift the dollar cap this year, experts warn that it is essential to reinforce the financial power of the Central Bank and accumulate sufficient reserves. The market considers that strengthening reserves is key to moving towards the elimination of currency regulations.
The agreement with the IMF will play a decisive role in the direction of the Argentine exchange rate scheme, especially in a context of declining global prices and negative repercussions from the drought on foreign exchange income prospects due to exports. This agreement is expected to provide exchange rate stability until the next legislative elections and improve access to international funds.
The government's stance, which seems divided between maintaining a nearly fixed exchange rate or moving towards a more flexible scheme, will largely depend on the capacity to strengthen reserves and improve the country's financial stability. The challenge of balancing inflation, reserves, and currency policy presents a complex task that will require careful decisions in the coming months.
