The former Minister of Economy during the Menem government, Domingo Cavallo, said that "the
inflation rate in February was closer to 10% monthly than the 15%
indicated by many consulting firms."
Therefore, "
the fall in the inflation rate offers the opportunity to increase the pace of the crawl
(gradual adjustment of the exchange rate)
and thus eliminate the risk of a devaluation jump in the coming months," he warned.
From his blog, the former official of the '90s noted that "in addition to the fact that the price of food and other goods sold in supermarkets had increased excessively in January, goods that were normally adjusted according to the price of the parallel dollar, such as For example, electronic ones, had to face the drop in the price of pseudo-free dollars," he wrote.
According to his vision, "the delay in adjusting the regulated prices of electricity and gas helped
the inflation rate in February to be lower than what the analysts
who feed the market forecast survey published by the Central Bank anticipated. ".
"Despite this slowdown,
the real exchange rate is already at levels close to the average for the period 2018-2023.
This means that the real exchange rate relevant to exports, which is lower than that of imports due to the tax country, is
dangerously
close to the levels from which it should have been devalued in the past.
And he then states that
"the fall in the inflation rate offers the opportunity to increase the pace of the crawl and thus eliminate the risk of a devaluation jump in the coming months
. "
According to the former minister, "the average inflation rate for the month, which is what should be anticipated by what INDEC is going to publish, dropped to 10.1% and that of the last 30 days to 8.4%. These estimates were as of February 15 at 12.4% and 9.2% respectively, which indicates that the deceleration was strong in the last two weeks of February."
For Cavallo, "It is very clear that the reduction of the gap between the official exchange rate and the parallel exchange rate has helped the realignment of relative prices in a direction similar to what should be expected from a normalization of foreign trade."