The president of the Central Bank has admitted that February's inflation is high

Guido Sandleris, admitted today that January's inflation was "very high", while he predicted that in February the level would also be high. He explained the main guidelines that the entity must follow to combat inflation, but admitted that the task was more difficult than he thought. "We have not reached AC as expected. The road was harder than we had imagined. "

Although inflation forecast for this year is 25%, private consultants already believe that exceed 30%

"I am aware of the suffering caused by inflation among our citizens, especially the most vulnerable, and that is why the main objective of this central bank is to reduce it," he said. he declared at a meeting at Fundacin Libertad.

Sandleris said that the results of the last decades should not discourage us. We will achieve lower inflation and we will do it on a solid basis, "said Sandleris during his presentation, explaining that" logically, if we delay the exchange rate and rates, this will have short-term effects to contain inflation, because these prices generate increases. transient of it. But these corrections are necessary to sustainably reduce inflation. "

In this sense, he acknowledged: "Beyond the specific factors to explain it, inflation in January of 2.9% per month, It was very highand the most likely thing is that the February data are too. "

"Both imported and exported products are becoming cheaper, inflation expectations are under control and results are emerging," he said.

However, specify: "The problem is that in the meantime, an imbalance of the external sector is generated, which is maintained while the rest of the world is willing to finance us, but which leads to a depreciation and an increase. this funding is cut ".

The real exchange rate is today 59% higher than it was before the stock went out. The current account deficit in the fourth quarter was 1.2% of GDP, 3.8 percentage points lower than in 2017.

In the meantime, he ensured that the "late interest rate" was a "very used instrument until 2015", while stressing that it was "corrected for the most part".

"Logically, if delaying the exchange rate and rates have short-term effects to contain inflation, because these prices generate transitional increases," he said.

Sandleris, comparing the situation with that of other Latin American countries that have gone through long periods of strong inflation but which nowadays only have single-digit numbers like Brazil, Chile and Colombia. The economist stressed the need to lay a solid foundation for reducing inflation, but without mechanisms generating distortions such as rapid price limitation or the exchange rate delay.

The problem is that in the meantime, an imbalance in the external sector is generated, "which is maintained while the rest of the world is ready to finance us, but which leads to a depreciation and an increase in inflation. once this funding cut off "it happened