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Argentina rules out peso devaluation after currency tension

The president of the Central Bank of Argentina (BCRA), Miguel Angel Pesce, ruled out this Tuesday (12) a sudden devaluation of the Argentine peso, after several days of tension in the currency markets, which according to him are due to “speculative strategies”.

“We have a difficult situation, in which we have to defend (economic) growth. We don’t want to apply any recession recipes, nor any sudden devaluation, because it’s not necessary”, Pesce told AM radio750.

The head of the monetary authority claimed that the The country’s international reserves are sufficient, highlighting the seasonal impact of energy imports on the accumulation of foreign currency, one of the points included in the agreement between the Argentine government and the International Monetary Fund (IMF) for the country to refinance a debt of more than US$ $40 billion.

“This question that we don’t have reserves comes from 2020. Every second semester they start with the story that there are no reserves to generate agitation and speculative maneuvers, and we always overcome that. This time, we will also overcome it”, declared Pesce, arguing that reserves will begin to grow from August onwards, when the volume of fuel imports decreases.

“The BCRA, except for the fact that we have had fewer withdrawals from multilateral credit organizations, in the first half of this year it met the goals it had established for the accumulation of reserves”, pointed out the president of the institution.

These statements take place in a context of strong uncertainty in currency markets following the resignation of Martín Guzmán as Minister of Economy on July 2, which was caused, among other reasons, by internal disagreements within the Argentine government.

Since that date, the “blue dollar”, as the American currency available in the informal market is known, to which citizens resort due to the severe restrictions on the purchase of official dollars, skyrocketed 12 %, from 239 pesos to 268 per unit for sale.

The so-called “financial dollars the” rose even more: the dollar “counted with liquidation” has appreciated 18, 2% since the departure of the former minister, to 298 pesos per unit, while the “stock exchange dollar” or “MEP dollar” rose 15%, to 285 pesos.

In this sense, Pesce criticized supposed “speculative strategies that put pressure on the exchange rate”, with the objective, in his opinion, of obtaining “greater profits than they currently have”.

To resolve the exchange rate situation, the BCRA president emphasized that importers must recover international credit, which, according to his estimates, fell by US$ 4 billion during the Covid pandemic-19.

“Trade credit has already increased by US$ 3.2 billion this year. We don’t need an adjustment, we don’t need a sharp devaluation, we need to build a bridge to get to the point where we have less energy imports, and that bridge is built by importers who get financing,” Pesce said.

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