President Javier Milei gets tired of repeating that the economic program carried out by his government is “the most successful to date.” Queer. His despair to reach an agreement with the IMF, the bleeding of the central currencies to sustain the exchange rate (and avoid a devaluation that accelerates prices), show that little is successful.
This Friday there was Two bad economic news for Milei and Luis Caputo: the February inflation rose to 2.4%y The Central Bank sold $ 474 million of its reservationsit is the largest amount of currencies so far from 2025, and the second, not only of the Milei era (last December 26 dilapidated US $ 599 million, when importers took advantage of the end of the country tax to access the MULC), but since the end of October 2019.
Inflation
The government expected the inflation drill 2% monthly, but In February it increased to 2.4% driven by the jump of meat prices and rents increases. This increase is the consequence of the repeal of the rent law made by Milei and worsened the conditions to rent to the tenants.
The president justified the inflation data with a ridiculous argument “if we clean the specific effect of what has happened with the flesh, the inflation rate would have been 1.8%.” As several specialists pointed out, this means that if we eliminate the item that increases, of course, inflation will be lower. Another magic pass in the numbers presented by Milei.
In addition, it must be remembered that consumer price index (CPI) is behind by the consumption basket that inflation is analyzed and submitted due to the lack of a methodological update of INDEC, which the government takes. What also impacts the purchasing power of salaries, retirements and social programs, if inflation was updated the loss would be greater.
FOLLOW THE SANGRÍA OF RESERVATIONS
The Central Bank reserves are in red. After the highest sale of currency of the year he made this Friday The monetary authority ended the week with a drop of $ 14 million of international gross reserves. This official intervention is to maintain the exchange rate of the green ticket both in the official market and in the legal parallels.
The Current exchange account account It is deficit since June and In January the deficit was US $ 1,656 millionaccording to the Central Bank’s exchange balance report. This means that more dollars come from those that enter the country.
Meanwhile, this week the future dollar contracts began to be more demanded. Julio contracts rose to $ 1,177.5; while those of August quoted at $ 1,200. As transcended in the media, the pressure on the dollar is explained because banks and companies want green tickets for doubts around the negotiation of the agreement with the IMF. The fund is expected to press for accelerating the rate of monthly minidevaluations and the exchange rate will be higher, currently the crawling PEG is 1% monthly. That is to say, They expect a greater devaluation.
In this context, Donald Trump added more noise to the world economy, the implementation of tariffs has already begun and there is talk of a recession in the United States. Nor are good news for Javier Milei and “Toto” Caputo, since there will be greater instability and pressure on the dollar.
The government is prepoted with retirees and ratified the repression to advance with its adjustment plan. But it is a plan that has mud feet as demonstrated by lack of dollars and inflation that is not tamed. Official despair is evidenced in the search for an agreement with the IMF. This week the DNU was known to agree on a new mortgage with the agency (without going through Congress) although the small print or fund demands were not published. Milei and Caputo implore Kristalina Georvieva to get dollars soon. Can the government pilot exchange pressures and avoid a jump from the dollar? Wait and see.
Once again the arrival of the dollars in the fund will not be to improve the living conditions of the working class. They are currencies to guarantee the payments of the debt, of the same IMF, and another part will be “Toto” caputo as it did during the macrismo to finance the escape of capital. To do? It is possible to write another story, the fight of retirees, the resistance that was seen in the streets last Wednesday in rejection of the adjustment shows another path: we must reject the background agreement and face the ongoing looting.
Source: www.laizquierdadiario.com
