With each passing week the feeling that the Argentine economy is approaching the one we experienced in the eighties cannot be avoided. It does not mean that the situation will be exactly the same nor...
Hoarding Reserves Comes at a Cost
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Hoarding Reserves Comes at a Cost
First week
October 2022
After having managed to nearly 5 billion dollars in the foreign exchange market in September, the government launched a plan to take care of its new reserves. Logically, no one can disagree with the idea of strengthening the Central Bank’s balance. In fact, that is the biggest short-term problem the Argentine economy faces. The problem is how it plans to hoard reserves and at what cost for the rest of the economy. Issues like these must be analysed in general equilibrium, otherwise, solving one problem creates another.
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