He Government is preparing for a summer of key definitions in its economic policy, with the aim of stabilizing the economy, maintaining exchange peace and deepening the decline in price levels. One of the most anticipated measures is the reduction of the dollar devaluation rate.
He Government He has promised to reduce inflation even further and bring it to zero. Until now, the dollar has risen 2% monthly, behind prices, after the devaluation in December that made the dollar jump 118% and caused an inflationary flash.
Now, a lower rate of increase is being evaluated. If inflation remains around 2.5%, the crawling peg could be lowered to 1%. In addition, the elimination of the PAIS tax on account is expected, which would put downward pressure on prices in December and January.
President Javier Milei has confirmed that he is working on a new program with the IMF and a group of banks to obtain fresh funds that will allow lifting the stocks in 2025, although without setting a specific date.
Net reserves are negative by US$4 billion and it is estimated that between US$15 and US$20 billion are needed to finance the dollar debt. He Government It already has payments for US$ 4.5 billion on January 9 covered.
In line with the decline in inflation, the Central Bank reduced the interest rate last week from 2.9% to 2.6% monthly. The slowdown in the pace of devaluation is key to sustaining the “carry trade”, that is, the entry of dollars from exporters and lower payments from importers to invest in pesos, which in turn allows the Central Bank to buy foreign currency.
Rates
The Government’s idea is to continue reducing the interest rate as inflation continues to decline, although banks are asking for a “correction” to meet the increased demand for pesos. He Government It is also evaluating adjustments to utility rates.
The reduction of subsidies and the updating of rates are necessary measures to reduce the fiscal deficit and improve efficiency in the use of resources. However, these adjustments must be carefully planned to avoid a negative impact on the purchasing power of consumers and the competitiveness of companies.
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