Former minister of economics Domingo Cavallo questioned the policies of the Central Bank applied by its current president, Guido Sandlerisand his predecessor in the office, Federico Sturzenegger,
In his personal blogAlso, the former president of the Central Bank said that “if he strictly adheres to the declared type of monetary management, Sandleris will be worse prepared what sturzenegger meet with exchange rate".
"In both cases, that in Sturzenegger between December 2015 and June 2018, as in Sandleris from October 1, 2018, almost dogmatic commitment to clean flotationapproved in both cases by the IMF, is source of vulnerability in case of currency crisis, even more than fiscal weakness, "he said.
Cavallo stressed that “in case Sandlerishow you deal with currency intervention since the exchange rate has broken the floor “Non-interference zone”shows that he prefers to intervene very littlein accordance with the quantitative restrictions imposed by the IMF, so that, in fact, all this fabrication of the supposed exchange bands is nothing but disguise the clean flotation system ",
But the former minister believed that “this very limited intervention "to avoid expansion monetary base "is very bad signal for the future "because, in his opinion, if" eExchange rate will perforate the roof from the field of non-interference, sale of currency central bank I would be limited quantitatively appears to be committed to the IMF. "
“In that case, what happened to Sandlerissell happened to Sandleris, interfere with puchitos and not set the type of change as a goalended unable to stop running will change, ”warned Cavallo, who did not rule out a serious political crisis in this economic context. – I'm afraid that it will be delivered to all government, I hope this will never happen! ", – he said.
For Cavallo interest rate is a much more powerful tool fight inflation than quantitative control, "although he believes that"efficiency That would change a lot if they were combined. interest rate and aggregates monetary. "
On the other hand, the economist noted that increase bank reserves it's a lot cheaper for BCRA to produce a LELIQand although you can't normally control the amount of money and interest rate"In the Argentine case"Yes it is possiblebecause there is a third monetary policy tool that is bank reserves. "
He criticized that "the Central Bank is ready pay 4 billion dollars a year to banks so two monetary policy instruments, the monetary base and the interest rate are included. "But, in his opinion, do not focus on the exchange rate, Money person commits "Blunder" disregard the "possibility that people choose between local money and dollarsor between dollars and goods that "leave the economy"very vulnerable to currency exchangeeven more than it was in the days of Sturzenegger.
COST OF LELIK: $ 160,000 MILLION OF THE YEAR
" Monetary base is not the best guide quantify inflation. My goal is to help prevent a currency crisis before the elections, ”said the former head of the treasury during the presidency. Carlos Menem and Fernando de la Roi,
"In short, saving $ 160 billion is likely to depend on the profitability of banks, but considering how much they cost suffer from non-bank, large, medium and small companies“It does not seem unfair that some sacrifices are made by banks,” Cavallo added in a note published in a personal blog.
He believed that "the definition of the monetary base is not conceptually very adequate." In all banking systems of the world, including ours during convertibility, The monetary base is the sum of all monetary obligations. Central Bank. "
"How generally, Central banks do not issue debt in the form of securities or bondsThe monetary base is the sum of state-owned banknotes and coins (money circulation), plus bank reserves (banknotes and coins kept in banks, plus deposits of banks in the Central Bank). Always in local currencyUnderstandably, "he explained.
In this regard, he added: “How central bank (Argentina) yes he publishes (formerly LEBAC, now LELIQ), The monetary base should include the shares of LEBAC and LELIQ, as well as the balance of transfer operations with financial institutions. "
"The argument is that LEBAC and LELIQ paid liabilities The central bank, and therefore they are excluded, are not valid. Much of lace banks in the Central Bank, they are also paid, in fact they are paid at the cost of collecting deposits from the banks, "he said.
He warned that “this problem with the definition of the monetary base is not just a semantic problem. economic effect on the deficit fiscal. "