2023-10-23 19:21:50
© Archyde.com. FILE PHOTO: A one hundred Argentine peso bill sits on top of several one hundred U.S. dollar bills in this illustration picture taken October 17, 2022. REUTERS/Agustin Marcarian/Illustration/File Photo
By George Otaola
BUENOS AIRES (Archyde.com) – Argentina’s central bank is planning to hold fire for now on any major policy adjustments after a shock win for the Peronist government in a general election on Sunday, two bank sources said, a sharp contrast to rapid moves after an August primary.
Economy Minister Sergio Massa outperformed in a first round election on Sunday to take pole position ahead of a run-off vote next month where he will face radical libertarian Javier Milei, who wants to dollarize the economy and shut the central bank.
“I don’t see it on the BCRA’s (central bank) agenda,” one of the sources said to Archyde.com when asked about a potential hike to the benchmark interest rate from the current 133% level, set to help boost the peso and temper triple-digit annual inflation.
The bank had sharply hiked the rate and devalued the peso currency after Milei, a right-wing outsider, sent shockwaves through the country by winning an August open primary vote.
A second source, a bank advisor, said the entity “trusts there will be less pressure on the dollar” with the election result, which lowers the chance of a quick devaluation and makes Milei’s plans of dollarizing a more remote prospect.
Argentina’s peso has been under huge pressure in parallel markets in recent weeks, where dollars trade for almost three times the official exchange rate of 350 pesos.
“With a Massa president there would be some probability of recovering (bank) deposits in pesos,” the second source added.
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