Falling into dollarization, the liberal idea that divides economists – business and politics

Every time there is talk of something characteristic of the 1990s in Argentina, the implementation of the dollar-based economy is a fact that has set that generation of the country on fire.

Although he had not had much transgression, this week alone and without the signature of any member of his bloc, the National Representative of Radicalization in St. Louis, Alexandre Kakasofficially the initiative promoting the “official dollarization” of the Argentine economy.

The legislator from the College of Space “evolution” led by Senator Martin Lustow He received the rejection of his political sector, whose leader was completely at odds with the initiative, saying that “it is not only useless, but will be negative” for the country.

Specifically, the project proposed to “identify the United States dollar as the legal currency of the Argentine Republic”. It also sets the exchange rate for conversion between the peso and the United States dollar, which will be equal to “the quotient between monetary and non-monetary obligations of the Central Bank of the Argentine Republic and international reserves.”

Meanwhile, she noted that when the law comes into force, BCRA will replace the “circulated pesos with United States dollars at the conversion rate” set by the monetary institution. After this exchange, all financial operations, such as deposits, credits, issuance of securities, and any other operations through the financial system, as well as the accounting records of the financial system, will be expressed in “US$ . . .”

Among other proposed measures, is the imposition of a 180-day period for the entry into force of the new currency and the moratorium on the peso.

In Argentina, the proposal to dollarize the economy is not new, rather it is a recurring topic every time an economist is interviewed.

On this occasion, the deputy put forward the idea of ​​dollarization Javier Meli, which I presented as the “only valid prescription”. On the other hand, those who fail the initiative appeared. In this aspect, the head of the Central Bank, Miguel Angel Pesci; Former Minister of Economy Alfonso Pratt Jaythe economist Charles Melkonian as related sounds.

President of the Central Bank of the Argentine Republic, Miguel Angel Pescihe pointed out against those who put forth the idea, “Some talk about dollarization and sell it to you as a possible thing, but they don’t explain that to get there, you have to make a massive adjustment,” he said.

About the former Minister of Economy Alfonso Pratt JayThose who suggest you “don’t tell the whole truth” because they “hide” a potential Bonex plan and thus “remove weight”. In this sense, the economist analyzed that if you want to solve the problem of inflation, it should not be done through dollarization: “You must have an independent central bank; a board of directors which, if it does not comply, goes home and does not accept any instructions from the executive; and the right people to run it who are not friends with authority.”

Other voices referring to the topic were Charles Melkonianwho suggested “obviously going to a new monetary system without that stupidity I’ve read these days about unreserved dollarization, that utter nonsense.”

In this sense, the head of the Institute for Studies on Argentine Reality and Latin America (IERAL) proposed a program that he is preparing to present the next president emerging from the 2023 elections, based on the idea that “freedom must be”. It is granted to select and legally recognize the binary monetary nature of the Argentine economy.

“All those who have dollarization in their heads should contact Copperfield to see how this economy is being dollarized. Coperfield comes in, does like this (a few gestures) and fixes the BCRA balance.”He said it as he remembered the famous magician and prankster in the nineties. |