Former Minister of Economy, Domingo Cavallocriticizes politics central bank and further shows that his goal is “to help prevent a currency crisis before elections”.
“The monetary base is not the best quantitative benchmark for influencing inflation, my goal is to help prevent a currency crisis before the elections,” said the official, who also stressed that the monetary policy that Guido Sandleris used since then has cost the Central Bank 160 billion pesos in year.
In short, saving $ 160 billion is likely to depend on the profitability of banks, but considering that non-bank, large, medium and small companies are suffering, it does not seem unfair that some victims also make banks, "Cavallo said.
Exit from the Treasury Palace during the presidency of Carlos Menem and Fernando de la Ra noted that “the definition of the monetary base used 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 of the Central Bank” .
“As a rule, central banks do not issue debentures in the form of bonds or bonds, the monetary base is the sum of bills and coins that are state-owned (money circulation), plus bank reserves (banknotes and coins stored in banks). Central Bank.) Always in local currency, this is understandable, ”he described in an article published in his personal blog.
“Since the Central Bank issues public bonds (formerly LEBAC, and now LELIQ), the monetary base should include LEBAC and LELIQ shares, as well as a balance of transshipment operations with financial institutions,” he continued.
And he concluded: “The argument that LEBAC and LELIQ are monetary obligations paid by the Central Bank, and therefore excluded, is not valid.” A significant part of the reserve requirements of banks at the Central Bank is also paid, in fact they pay for the costs of collecting bank deposits. This problem with the definition of the monetary base is not just a semantic question. This has economic consequences for the budget deficit.".