Sandleris warns: pesos emissions in December could be less "generous" than agreement with the IMF

Expected cash expansion for December may not be as generous as originally agreed with the IMF. This was explained yesterday by head of central bank Guido Sandleris in a closing speech at a meeting organized by the Northwest America Council at the G20 Summit.

"Just as we have crossed the target of our currency base over the last few months, we could do the same thing in December if we realized the increase in demand for money was not what we expected", assured the official.

The agreement with the Fund sets the goal of zero monetary expansion, but in December it becomes much more loose. For the next month, it is expected that the increase could be 60%, which means an additional $ 70,000 million will enter the market. The reason is that at the end of the year, demand for money is growing due to the need for companies to pay a salary, half the bonus and now also a bonus.

Sandleris wants to show the permanent behavior of the Central in relation to the control of monetary aggregates. The goal is very clear: avoid sudden dollar jumps while pushing inflation down.

The movement of the currency, which grew by nearly 10% from the floor at the beginning of the month and reached around $ 40, led to a stronger crunch from the BCRA. Over $ 60,000 million has been spent in the last two days to prevent the exchange rate escalation. Obviously, indirectly, the Leliq interest rate was also slowing, which was now slightly above 61%.

The head of the BCRA was satisfied with the result of the debut of the new system of monetary aggregates. And he announced it "high-frequency indicators" are beginning to show a fall in inflation in November. It is estimated that this month the index will be slightly below 3%, which is almost half that recorded in the previous two months.

In addition, he stressed that the most competitive exchange rate allowed the country to arrive in September "the first commercial surplus in 21 months".

"He still has a lot of work to do. This central bank – concluded by Sandleris – will be very cautious in the coming months and will be aware of the risks faced by its economy. We will only change the currency base if conditions allow. "

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