The Argentine government has set a reserve accumulation target of approximately 4 billion by June and 8 billion by December, maintaining its stance of buying reserves only when the exchange rate tends to be below the floor of the floating band. According to the Central Bank, acquiring reserves while the exchange rate is within the band could increase inflation by pushing the value of the dollar up and adding more pesos to the economy.
However, some experts disagree with this approach and believe that buying reserves would help reduce country risk and contribute to economic growth. Re-monetization through the purchase of reserves could be beneficial for the economy by increasing the demand for money and facilitating Gross Domestic Product (GDP) growth.
On the other hand, there is a proposal to extend the use of the dollar in Argentina to encourage currency competition and allow citizens to choose between saving in pesos or dollars. For this system to work properly, it is crucial to eliminate the exchange rate restrictions that still affect businesses.
Regarding monetary policy and inflation, there has been an increase in the monthly inflation rate in March, raising concerns about the disinflation process. However, the inflation rate in April is expected to remain stable due to the lower variation in service prices.
As for the real exchange rate, efforts are being made to improve the competitiveness of exports, and its evolution is being monitored to avoid negative impacts on the economy. The government has taken measures to stabilize the exchange rate and promote sustained growth.
In summary, Argentina's economic policy focuses on reserve accumulation, currency competition, fighting inflation, and stabilizing the exchange rate to boost growth and economic stability in the country.
