The Government’s Plan in Enigma Mode
The government has found itself in a dilemma that now seems difficult to resolve. The strategy was diametrically different from Macri’s. Quick on fiscal matters, but with infinite patience to lift FX controls. However, the exchange rate problem never stopped being there, and managing expectations and timing to resolve it has become crucial.
Trump Is Sending Markets Into Turmoil With No Clear Endgame
Trump’s second term is much more aggresive than his first. Just two months after taking office, he has already managed to throw the market into turmoil. According to his own words, his goal is to “rebuild the country,” eliminate the trade deficit, boost production, and prioritize local jobs. But his constant back-and-forth—especially regarding tariffs—has been […]
The IMF, Exchange Rate Policy, and the Cepo
We are on the verge of an agreement with the IMF. With that backing, the Argentine government promises to move toward greater exchange rate flexibility and the lifting of capital controls before the end of the year. But how and when will this happen? For now, there are more questions than answers.
Too Many or Too Few Pesos? It Depends on How You Look at It
Some voices in the city and government offices claim that money printing has stopped, that there will be a shortage of pesos, and therefore, there’s no reason for the dollar to rise. But is it really true that money printing has ended and that there aren’t enough pesos? It depends.
The Second Half is a Struggle: Bring in the IMF
The last few weeks have been a real headache for the government. The Merval has been on a slide, accumulating a fall of more than 20% in dollars so far this year, and the country risk jumped more than 200 basis points to 780. The FX spread, which until a few months ago was plummeting, […]
The LIBRA Scandal and What (Really) Matters
It started as a local phenomenon and quickly became a global one. Until last week, Milei seemed like the rockstar of global politics, but then came the LIBRA scandal, and his credibility was damaged. What are the implications?
The Infrastructure Puzzle: Balancing Fiscal Discipline and Growth
Argentina is at a crossroads: on one hand, the government is cutting public investment to maintain the fiscal surplus, and on the other, it is betting that productivity gains will offset the appreciation of the real exchange rate. When asked about investment, Government officials repeat almost dogmatically: Let the private sector handle it! But… does […]
Cepo: Time to Start Thinking About D-Day
One year into Milei´s economic plan, the results have been successful. Inflation has dropped rapidly, the exchange rate spread remains contained, credit is growing, real wages are recovering, and economic activity is picking up. Meanwhile, the Central Bank has purchased over USD 23 billion, though reserves have not increased due to debt payments.
A Temporary Relief for Agriculture
The government surprised everyone by announcing a temporary reduction in export taxes for the agricultural sector and their elimination for regional economies, leveraging the excellent fiscal results achieved in 2024. The measure comes ahead of a scheduled meeting between Caputo and the agricultural sector representatives, where producers were expected to demand lower export taxes. The […]
An Oxymoron: Currency Competition with FX Controls
Argentinians have a tendency to think in dollars, a result of the inflation that has tormented us for so many years. It feels almost natural to convert prices into dollars when dining at a restaurant or buying a t-shirt to assess whether it is expensive or not. There is no doubt that we also consider […]