Milei minister hints new exchange rate of 650 pesos

[Quilombo]

My question is, why is Milei doing what Massa would have done anyway? Is 650 any more defensible than 364? Wasn't Milei elected to dollarize the economy, which would imply immediately removing the managed exchange rates?

I'm guessing he earnestly believes we're on the verge of hyperinflation and that doing so would push us over. I don't think 650 is much better considering the estimate that we close out 2023 with 200% inflation, and prices seem to be set increasingly at a dollar of 1K, but I guess they're not ready to eliminate things like the impuesto PAIS and perceptions, so if you raised the BCRA dollar to $1,000 it would make the dollar tarjeta $2,550 which would piss off a lot of people.

We'll see what measures get announced tomorrow at 8AM at the Palacio de Hacienda; apparently that's when they're revealing a bunch of stuff

 

[sts7049]

I believe Massa is on record as saying the various exchange rates had to be unified, implying a devaluation. I don't know who would be kidding themselves about that.

I think the 27% official rate devaluation resulting in a 12% monthly inflation jump reflect the fact that the official exchange rate (and, for that matter, the Blue rate) are relevant to a small part of the economy. Most of the economy has moved to rates closer to the Blue/MEP/CCL or whatever. Even if you don't want to admit it, Massa has already done most of the hard work of moving the economy closer to a "real" exchange rate , if in a piecemeal fashion with multiple exchange rates that he stated need to go away.

My question is, why is Milei doing what Massa would have done anyway? Is 650 any more defensible than 364? Wasn't Milei elected to dollarize the economy, which would imply immediately removing the managed exchange rates?

because milei knows that the burden on the treasury / central bank to keep the rate in the 300s is not sustainable. Massa would never have admitted that. remember they only raised it to 350 after their party loss

 

[FrankPintor]

because milei knows that the burden on the treasury / central bank to keep the rate in the 300s is not sustainable. Massa would never have admitted that. remember they only raised it to 350 after their party loss

If I remember correctly, the agreement with the IMF in July didn't allow for an increase in the official rate until some time in November, at which point the "crawling peg" resumed.