The economist again pointed out against the inaction of the highest authorities of the Central Bank and criticized the lack of an economic plan
By iProfessional
27/04/2023 – 14,05hs
In the middle of the currency crisiswhich aggravates the economic situation of the Argentinathe economist and Secretary of Strategic Affairs of the City of Buenos Aires, Martin Redradohe came back to criticize to the inaction of the Central Bank commanded by Miguel Pesce and the new interest rate hike.
“It’s shooting yourself in the foot to raise interest rates. The problem is fundamental, you have to start unravel the amount of distortions that there is in the money market and pesos, instead of raising the interest rate, withdraw pesos from the market, lower the issuethat would be more effective, because we have to look at how many dollars there are, how many pesos there are,” he said on CNN radio.
The Board of Directors of the Central Bank announced a rise in the interest rate for fixed terms. The escalation of the dollar that occurred this week accelerated not only the times, but also the magnitude of the rise: the rate would go from the current 81% to 91%, an increase of ten percentage points or, as they say in financial jargon, 1000 points basic, much higher than expected.
“It took two weeks to calm down. What these days is a balmalthough there is something that surpasses that of the Central that is the lack of economic plan“He said in dialogue with CNN radio.
The monetary entity had been applying the increases in the rates in the first meetings (they are always held on Thursdays) after knowing the inflation data. This was done on Thursday of last week, when it raised the rate from 78% to 81%, 300 points, after the INDEC released the 7.7% inflation rate for March
The former head of the BCRA maintained that in an exchange crisis such as the one experienced by Argentina, where the blue dollar touched $500the first reaction on the battlefront should be that of the banking authority and assured that there is a “lack of expertise” on the part of the officials to understand the exchange market.
Martín Redrado once again criticized the inaction of the Central Bank led by Miguel Pesce
Redrado, against Pesce: what did he recommend him to do?
Days ago, through his Twitter account, Redrado had questioned the inaction of the president of the BCRA, Miguel Pesce. “For overcome a currency crisis like this, the Central Bank must show reflex capacity, absent until now,” he said.
Now he questioned again that Pesce, or a director, is in charge of the entity’s trading desk from 10 a.m. to 3 p.m., which is when the markets are operating to be able to take “surprising positions” and not “run after events “.
“Whoever is on the front lines of the battle is the Central Bank and it can be seen that it took two weeks to finally be able to calm down,” he said.
Furthermore, he added that lacks expertise to understand where the bond market is, the exchange market, the futures market. “One has to put all the firepower on the field, work in the present market, purchase and sale of bonds in local currency, foreign currency, purchase and sale of future markets in operations that are simultaneous to make one one two in terms of the pineapples that I’m hitting”, he remarked.
