Argentina's Economic Outlook 3Q 2014

Two months after Argentina entered into an 'exotic” default, there are already some concrete consequences: Central Bank reserves started to fall again and tensions on the exchange rate front are rising.

Fábrega resigned to Central Bank presidency and was replaced by Vanoli, who is closer to Kicillof than to Fábrega’s thinking. The main risks going forward are that the currency could become more overvalued in real terms, a situation which will force a tightening of foreign exchange and import controls, and would lead to an increase in the spread between the blue and the official exchange rates.