Latest Financial Problem: Peso Shortage At Banks

[sleazemerchant]

Further Kirchner economic mismanagement: since the Central Bank has tightened monetary policy, banks have had to raise wholesale interest rates again to attract more pesos, and they're running short:

http://www.ambito.co...a.asp?id=733181

I.e., if you have ARS $1m you can park it in the bank for a month and get a 28.5% return.

To solve this latest problem Cristina needs to learn from her friends at the Fed and start spending more pesos into the economy.* If she doesn't, the peso will increase against the dollar, making Argentine exports less attractive, meaning higher unemployment.

Discuss.

*(oversimplification of Fed policy)

I'm not sure if you are being facetious or not, but this is not economic mismanagement. Tightening monetary policy is working to lower inflation and the blue dollar by taking pesos out of circulation and into "plazo fijos". When the APR offered on a "plazo fijo" exceeds the combination of the rate of inflation and the expected devaluation of the currency rational market participants will put their money into said instruments. This policy, combined with denying the unions the ridiculous raises they are asking for and cutting the federal budget deficit via eliminating subsidies is the correct way to lower inflation.

 

[Don Alberto]

Further Kirchner economic mismanagement: since the Central Bank has tightened monetary policy, banks have had to raise wholesale interest rates again to attract more pesos, and they're running short

Nah, nah, yer gotta unnerstan hoigh foinance, Argentine style:

No money means no buy stuff.
No buy stuff means prices don't get raised.
Prices don't get raised means no inflation.

A brilliant move according to the K economic model.

 

[ajoknoblauch]

I'm not sure if you are being facetious or not, but this is not economic mismanagement. Tightening monetary policy is working to lower inflation and the blue dollar by taking pesos out of circulation and into "plazo fijos". When the APR offered on a "plazo fijo" exceeds the combination of the rate of inflation and the expected devaluation of the currency rational market participants will put their money into said instruments. This policy, combined with denying the unions the ridiculous raises they are asking for and cutting the federal budget deficit via eliminating subsidies is the correct way to lower inflation.

With luck and a 28.5 percent interest rate, you might break even after inflation.

 

[Dublin2BuenosAires]

The Blue Dollar is far to useful to this government/cabal as a dumping groud for dirty money for it to be shut down. They have stabilised it at 11ish and stabilised the devalued pesos at 8-ish. They aren't interested in shutting it down as they will need it to cash out their chips when the dealer calls time.

I will say that I sort of believe that little Axel isn't involved in dirty deals. Or at least he is less blatant than some.

 

[EdRooney]

I'm not sure if you are being facetious or not, but this is not economic mismanagement. Tightening monetary policy is working to lower inflation and the blue dollar by taking pesos out of circulation and into "plazo fijos". When the APR offered on a "plazo fijo" exceeds the combination of the rate of inflation and the expected devaluation of the currency rational market participants will put their money into said instruments. This policy, combined with denying the unions the ridiculous raises they are asking for and cutting the federal budget deficit via eliminating subsidies is the correct way to lower inflation.

Hmmm let's see, Peronists wanting to fight inflation by lowering wages and increasing unemployment.... Where have I heard that before?

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