Claudio Loser on exchange rates: "People will have to get used to it"

Claudio Loser is the most advanced Argentine economist in the structure of the International Monetary Fund. He was director for the Western Hemisphere between 1994 and 2002.

In dialogue with PROFILE since his retirement in Washington, badyzed as an unlikely and "negative" scenario according to which the IMF granted the government a greater margin of action on the exchange rate. "People are going to have to get used to these bullfights," he said about the one that took place last week, when the dollar reached $ 43.50. "Even if they are small, they can happen," he warned.

The $ 60 million that will be able to sell the treasury every day from April, can they curb the potential rise in the dollar?

I think it's a significant amount that reflects the availability of dollars that the government has and IMF approval. Whatever it is, I think that it should be treated with care and not sell every day, but let the exchange rate fluctuate and intervene only when there is a significant leap in the exchange rate.

The zone of non-intervention on the exchange rate contains in itself a devaluation of the peso close to 30%. Would it be possible for the IMF to agree to reduce it?

From my point of view, a floating exchange rate, even without a band, is the best. From this base, I say that broadband, even if people are scared, gives more security to the government and that people will have to get used to these bullfights, even if they are small, they can happen. Having a flotation tape too small in the world today is not a good idea. Argentina is in the world and major currencies, even those of neighboring countries, fluctuate considerably. If the country remains very rigid, it can create imbalance and scare. The groups are doing well.

But could the IMF be pragmatic and agree to reduce the range if dollar jumps generate governance problems?

Is the IMF already pragmatic? The group is very innovative. In our day, there was total freedom or some kind of predefined change. obviously there is a problem of governance. The central bank does not have a reserve position large enough to be able to intervene more often. Unless foreign exchange controls are put in place, this would have negative consequences and would not be supported by the IMF.

I understand what the strong fluctuation of the dollar in Argentina represents. But reducing the group, although it is not a technical folly, is more risky. This would be negative because Argentina in general has not kept the rules very often, it has changed them too much.

From the political point of view, what does the agreement with Argentina for the IMF represent?

Given the amount he has lent to him and the fact that this is a return for the Fund in Latin America, it is very important. It's not that the Argentine economy is a lot in itself, but it does have a picture element because of its history and the way the Fund has become involved.

How would this affect for the organization that the government ended badly?

Obviously, that would touch him. It's not that the fund was going to be destroyed or anything like that, but it would be a blow for prestige and, therefore, it would have fewer opportunities to increase its capital and maintain its relevance.