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The former of the BCRA.
For Federico Sturzenegger, former head of the Central Bank under the administration of Mauricio Macri, four moments marked the path of economic management and mistakes made to achieve the crisis that we face today.
As indicated Pablo Wende In a note to Infobae, the former president of the BCRA carried out a 58-page technical work entitled "The macro Macri: the zigzag path of stability and growth", in which he marks four management moments and the respective errors.
In this text, for example, it is clear that after the "28-D" – the day that Peña announced the new inflation targets – the power plant ceased to be independent of the executive power and guarantees that, if it did not comply with this change, the inflation targets would have been drawn.
Look at the four points that criticize management:
According to the former BCRA, the government was ready to change the inflation target at any cost, "even by referring the president of the Central Bank". Dujovne changed the goal "10-12%" to 15% at a conference with Peña. "The government explained at this press conference that it wanted more inflation and that it was therefore facing the plant," he said. "When the fund lowered the benchmark rate by 75 basis points for the second time in January, without any real justification, the markets came to an institutional change: the dollar started to rise and the country's risk to increase." he added. The expected inflation, which was 17.4% for 2018, jumped in one month, in January, to reach 19.4%. "The loss of credibility has become a permanent shock."
Mention another key date in this process, April 24th. On that day, the new financial income tax began to be applied to foreign debt holders, resulting in a large capital outflow. There has been a process of exchange rate depreciation, accompanied by a severe drought that has reduced the inflow of dollars and an external crisis that has also resulted in the devaluation of others. emerging currencies. Argentina lost access to financial markets and had to resort to the IMF,
Sturzenegger noted that the legacy left by Cristina Kirchner's government was worse than the one estimated. The primary deficit amounted to 3.8% of GDP, plus interest on the debt. "The decision was made to make a gradual adjustment, which should represent between 1.5% and 2% of GDP per year." It's this legacy, including the duties to de-icing, which explains the explosion of inflation the first year. According to the first of the BCRA, the most important element was the absence of fiscal adjustment, which had been projected at a primary deficit of 2.5% by the end of 2016, but ended with double: 5.4%.
For the former manager, the market was decisive in August, because of the decision of the plant to go out saving the Lebac according to a pre-established schedule and absorb the weight resulting from these operations. "In the August 15 call for bids, he saved the equivalent of $ 3.3 billion from Lebac, but then sold reserves for only $ 1 billion to absorb. as a result, the monetary base has increased by 16% in one day. " Sturzenegger thinks it is for this reason that the exchange rate has gone from $ 30 to $ 39.6 the following days. This generated a strong inflationary peak of 6.5% in September and 5.4% in October.
For the specialist, Sandleris' decision to promote an aggressive rate cut of 59% at the end of the year to 44% in February was a mistake. "It was clear that the plant would not absorb the excess liquidity left by the months of August and December," he adds. According to his badysis, this led to a new exchange rate jump of 11% in one month, then to another peak of inflation in March, of the order of 4.7%.
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