Top Mission to the Fund: making David Lipton more flexible

A man best known in Buenos Aires as an ideological architect of the explicit prohibition that the government of Mauricio Macri uses part of the body's money to prevent any possible leakage of the dollar. The president of the Central Bank will then have the mission to study with the head of the British Monetary Fund the possibility of a certain flexibility in its difficult position in front of the alternative of being able to have a part of the IMF's money to implement a "responsible exchange policy", according to the maxim hit in Argentina before the start of the trip to Washington.

Sandleris and other officials are participating in the annual spring meeting that the Monetary Fund and the World Bank are holding in Washington, and will be officially taking place today.

The opening ceremony of the event will be the first round of debate on the global economy as part of the G20 meeting, where Argentina still has a coordinating role. This will be the first time that at this type of meeting, at the IMF summit, the case of Argentina will be debated as a general component of the global economic march. The idea of ​​putting it on the agenda is added to that of Lagarde herself, who still considers that stand-by-March signed with Argentina is an example of the new wind of the organization.

After this participation and in the building of the Fund, this will be the moment when Sandleris and Lipton will have their bilateral relations.

It's about old acquaintances. In September 2018, Lipton endorsed the proposal to set up the non-intervention zone designed by the duo Sandleris and Gustavo Cañonero as a mechanism to contain the dollar for the post-Luis Caputo.

Sandleris, with the endorsement of the Western Hemisphere's general manager, the Mexican Alejandro Werner, has decided that the minimum and maximum seats allocated to Washington during the negotiations would be closed by 2.0.

Lipton is a technical and ideological advocate of free exchange rate flotation and the strict use of the Fund's currency to liquidate debts contracted and to ensure that states do not default. All this in return for a budgetary adjustment sufficiently difficult for these countries to quickly recover their macroeconomic balance.

At that time, Lipton and his colleagues in Washington were horrified by the mechanisms used in the management of Luis Caputo, the BCRA, where the newspaper opposed the rising dollar, confronting speculators with foreign exchange investment. Central Reserves. The money that came from the IMF was considered his and therefore prohibited as a fighting tool for the daily loss of value of the peso. Lipton is the ideological heir of Anne Krueger, chief executive of the World Bank and former managing director of the IMF, at a time when Argentina had failed in 2001; and one of the many "enemies" who left the country after the release of convertibility within the organization. Krueger let the agency teach that one should not lend money to Argentina to conduct monetary policy, given its historic willingness to finance steady losses in the face of the rise of the dollar in situations of fiscal imbalance.

Lipton, an American like any other number two from the IMF, picked up this creed as soon as the country returned to the organization and used it as a banner during all pending negotiations, in its first version in June and September. past year.

Like a large part of the Monetary Fund, he considers that the only valid foreign exchange policy is to let the rules of supply and demand impose a price. In other words, apply a float and it is the ratio between the amount in pesos and the dollar bid that determines this value. From Casa Rosada, it is considered that this quasi-medieval view of the exchange rate policy does not serve a case like that of Argentina, where the main problem of the economy (recognized by the IMF as disappointing) is the acceleration of inflation. and where a sharp rise in the dollar inevitably leads to an increase in prices that will not be solved with readjustments subsequent to the decline of the currency.

Sandleris' current mission will obviously not be to convince Lipton, an impossible task in the current circumstances.

In addition, after reading the report Friday at the IMF board meeting, it is clearly indicated by Washington that Argentina now has valuable and useful weapons to deal with a currency exchange.

What Argentina could get at this joint summit of the IMF and the World Bank, it's kind of a promise to reopen the debate, in case the dollar market gets complicated when the electoral process is in full boiling.

And when the price of the dollar is a decisive factor when choosing whether Mauricio Macri will remain in the House of Government or whether it will be another or another who will badume the presidency. It is known to

Buenos Aires that the alternative of a victory of Cristina de Kirchner would be a strong enough argument and convincing enough to twist an ideologically as strong as that of Lipton. The truth is that out of the 77 478 million US dollar reserves of the BCRA, the country has a free leeway of about 25,000 US dollars to freely intervene in the foreign exchange market.

The rest of the money is made up of IMF contributions, swap China and Basel bank funds and other international contributions.