He parallel dollar It is rising and in recent days it has exceeded 1.400 pesos. He also uploaded the risk countrya symptom of nervousness and uncertainty about the government plan.
It sounds like a movie that has been repeated, but what is striking is that this crisis is happening after the government celebrated the approval of its first law, after six months of saying with great fanfare that a new stage was coming.
What’s going on? It seems that “the markets”, that is, the financial sector and concentrated economic groupsthey are in a tug-of-war with Milei and they ask her for even more: They are pushing for a devaluation.
So on the one hand, If the government devalues, inflation shoots up again. The slowdown in prices is the only achievement Milei can show. A rather weak achievement, by the way: 4.2% monthly inflation is not “low” at all; they already say that it rose again in June and they have been sustaining it with maneuvers such as postponing rate increases and stepping on the dollar.
A devaluation would generate an inflationary overflow and, together with the rise in interest rates, would further accentuate the recessionary tendencies of the economy.
The government says for now that it will not devalue. But since it needs dollars, it seeks to sink imports by way of more recession and adjustment. It even announced that it expects a 3.5% drop in GDP this year, which implies more unemployment.
On the other hand, If the government does not devalue, it will immediately have a hard time accumulating dollars.In June, the Central Bank failed to increase its reserves and is expected to lose another 3 billion in the coming months. Why?
The devaluation is being demanded by the countryside, which exports its crops and is not selling them off in anticipation of a higher dollar. But it is also being demanded by the IMF, which is issuing guidelines for the government to lift the restrictions and accumulate dollars to pay the debt.
Neither of the two alternatives, a deeper recession or devaluation, are good for the working majority. The entire economy of the country is subordinated to the interests of financial capital, the IMF and large national and international capital. Milei and the IMF are leading us to a bigger crisis.
To overcome this state of decline of years ago Serious resistance to the adjustment plans must be organised from belowand strengthen our currency from a sovereign position, starting with ignore foreign debt.
Source: www.laizquierdadiario.com
