The president of the Central Bank (BCRA), Miguel Pesce, said on Wednesday afternoon that “they are working intensively with the International Monetary Fund to reach an agreement” for the signing of a new debt financing program of US $ 45,000 million contracted in 2018, during the government of Mauricio Macri.
Before an auditorium made up of around 250 businessmen, as the main exhibitor of the panel The export challenge and the exchange balance: financing for production, from the twenty-seventh Industrial Conference organized by the Argentine Industrial Union (UIA) that was held at the Parque Norte exhibition center, Pesce assured that in this negotiation “we are not working with the logic (that the IMF had) in the 80 ‘ , which were recessive strategies. There is understanding about the problems of poverty that our country has and that any recessive process would bring social problems ”. He recalled that “it was classic to ask the Fund for countries to cause exchange rate jumps”, but stressed that this is not present in the negotiation and they do not believe that it has worked either. “They only provoke an acceleration of inflation and generate greater poverty,” he explained.
The BCRA head said that the increase in exports and the development of the financial system “are two issues that are not on the political agenda” but are necessary for Argentina to move forward. He affirmed that the country is experiencing “significant growth in exports of industrial origin”, but pointed out that “to reach the peak of 2011, we need US $ 10 billion and, for that, we need the commitment of the State and private companies. “. He stressed that it is necessary to export at least US $ 90,000 million to reduce external restrictions. And he was optimistic: “Argentina always surprises; We thought it was going to grow 7% and now it gives us more than 9%, and some estimates give more than 10% and that also generates some conversations (with the Fund) about fiscal aggregates ”, Pesce acknowledged.
In addition, Pesce called for transforming Argentine savings into investment. “Since 2007 there was an import of US $ 170,000 million in banknotes to sell to Argentines and before that date there were 50,000 million, according to the Federal Reserve,” he recalled as an indicator of the savings that exist in the country and added that “together with These funds, we have an amount of 44,000 million dollars in Leliqs, but there is a strong challenge to transform that savings into productive investment and help families ”.
The official announced that, with regard to loans to the productive sector, the banks “have disbursed 1.2 trillion pesos” for investment. “Banks comply with the 7.5% quota of deposits in productive investment, but they complain because they cannot comply with that quota, and that would have to be discussed jointly, between the entities and the UIA to see why not is achieved”. And he pointed out that, based on a growth in exports, and an understanding with the IMF, “the restrictions of the exchange market will be released, and that will help to put pressure on the financial market of the dollar.”
The president of the Central Bank said: “To the extent that the inflationary process allows, we are going to change the devaluation step that we have had until now. We have to balance the competitive exchange rate on the one hand and the inflationary level on the other. ”.
Pesce, referred to the price of the US currency: “That someone is willing to form assets paying $ 200 per dollar is something that does not keep any rationality. It is not the exchange rate that governs the Argentine economy ”.
