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End of Currency controls and the Cepo in Argentina

B

Bingo

Member
Is it really the end? I read this article about the controls being lifted but it is confusion as some are saying it is not a big deal and some are saying it's totally gone.

www.infobae.com

Luis Caputo anunció que el lunes se termina el cepo cambiario: el dólar oficial flotará entre $1.000 y $1.400

El ministro de Economía lo informó en conferencia de prensa luego de que el Banco Central anticipara la fase 3 del programa económico. También finaliza el dólar blend y habrá un desembolso de USD 15.000 millones por parte del FMI en 2025
www.infobae.com www.infobae.com
 
It's not a total end to controls. Partial. But any move in this direction is a good one to start out of it. The exchange will float between 1000 and 1400. They tried this back in 2018 and it didn't work ultimately. This is supposed to go into effect Monday morning.

The key will be the government not having to intervene much and waste their reserves depending the peso. The idea is they only do if it goes above 1400 or below 1000.
 
We will know on Monday morning to see how locals react. They purposely announced this on a friday after the markets were closed. They are also increasing the range to defend the exchange rate 1% monthly. So in month 2 it would be 1414 and then month 3 1428, etc.

Trump came through for his friend Milei after all. $15 billion up front was better than what they were expecting. Probably felt bad that all his actions are causing Argentina a tougher time.
 
CraigM said:
World Bank chipping in as well...

www.worldbank.org

World Bank Group Announces US$12 Billion Support Package for Argentina’s Economic Reform Program

The package is designed to support reforms that continue to attract private investment and further boost the measures being implemented by the national government to promote job creation.
www.worldbank.org www.worldbank.org
Click to expand...
I saw that and Bessent is coming to Argentina this week maybe to give a loan to Argentina to get rid of the debt swaps with China? All good news for Argentina. The stock market and things like real estate will probably skyrocket if Trump doesn't do anything crazy. The last time after Macri got the IMF funds everything went to the moon. 2 of my neighbors sold their apartments during that time period when prices skyrocketed.
 
Blockchain said:
Gotta give Milei credit for trying this before the elections! Maybe he can get things back on track but you never know with Trump! Trump's antics probably have more to do if this will work or not creating chaos in the global markets.
Click to expand...

Some people said even on this forum that Milei would never remove the cepo. Some journalists and pseudo-economists said that Milei was 'in love' with the cepo and recently some said that he would remove it but after the elections.,,, none of that happened XD.
 
enbits said:
Not an expert in economy but the difference between Macri's presidency and Milei's is that now we have surplus and Macri did print a lot of money. The situation is pretty different.
Click to expand...
Correct. Macri never turned off the printer and kept printing money. They aren't doing that this time so theoretically it should be much different this time but we also didn't have someone like Trump back then doing these nutty things that disrupts the world economy. Time will tell.
 
enbits said:
Some people said even on this forum that Milei would never remove the cepo. Some journalists and pseudo-economists said that Milei was 'in love' with the cepo and recently some said that he would remove it but after the elections.,,, none of that happened XD.
Click to expand...
This is very welcome news and the correct decision by the government. I have been pushing for them to remove the CEPO last year or at least get to this stage. I realize it was tough without enough money but I worried they would get to a situation like the past few weeks. This is great news and a lot of cash from the IMF and other entities. We will have to see what happens this week but it is great news.

Foreign companies won't invest here until the currency controls have ended. There is still a long way to go but this is a good start.
 
We definitely needed an end to the CEPO. It's not completely ended, especially for corporations but agree Milei needed to try before the elections. Companies simply will not come in large masses until it's completely over with. Also, they need to continue on with labor/employment law reforms and tax reforms otherwise they won't come.

An excellent article in the Economist today on the challenges still ahead. When the IMF has to do a huge package like it is doing it means that the situation is very desperate. I'm reading a book now that is very interesting on the past IMF packages to Argentina. It's called And the Money Kept Rolling In (and Out).

www.economist.com

Javier Milei’s big move to normalise Argentina’s economy

A gob of IMF cash will help partially float the peso, but political and market risks abound
www.economist.com www.economist.com
 
earlyretirement said:
We definitely needed an end to the CEPO. It's not completely ended, especially for corporations but agree Milei needed to try before the elections. Companies simply will not come in large masses until it's completely over with. Also, they need to continue on with labor/employment law reforms and tax reforms otherwise they won't come.

An excellent article in the Economist today on the challenges still ahead. When the IMF has to do a huge package like it is doing it means that the situation is very desperate. I'm reading a book now that is very interesting on the past IMF packages to Argentina. It's called And the Money Kept Rolling In (and Out).

www.economist.com

Javier Milei’s big move to normalise Argentina’s economy

A gob of IMF cash will help partially float the peso, but political and market risks abound
www.economist.com www.economist.com
Click to expand...
The desperation of Milei stinks. Look at his logs to his residence. The only thing he is concerned about his is social media presence. He knows he is toast and has to keep paying to try to help with his image. Inflation is going to skyrocket before the elections. It already started! Look at March. Why do you think the IMF did a big package more than normal. The government is in big trouble.

www.batimes.com.ar

Milei in solitude at Olivos? Probing entry logs for absentees, regular visitors

Official records show President Javier Milei receives very few officials at the Olivos presidential residence, not even from his partner or sister. The surprise is digital influencer Iñaki Gutiérrez, a regular visitor.
www.batimes.com.ar www.batimes.com.ar
 
Larry said:
The desperation of Milei stinks. Look at his logs to his residence. The only thing he is concerned about his is social media presence. He knows he is toast and has to keep paying to try to help with his image. Inflation is going to skyrocket before the elections. It already started! Look at March. Why do you think the IMF did a big package more than normal. The government is in big trouble.

www.batimes.com.ar

Milei in solitude at Olivos? Probing entry logs for absentees, regular visitors

Official records show President Javier Milei receives very few officials at the Olivos presidential residence, not even from his partner or sister. The surprise is digital influencer Iñaki Gutiérrez, a regular visitor.
www.batimes.com.ar www.batimes.com.ar
Click to expand...
Good Lord that is quite the microscope they have him under! I wouldn't get too worked up about these things. October is still six months away which is a lifetime in politics even for stable countries. Milei's been given a huge lifeline and if he can stay focused, a lot can get done before October.
 
CraigM said:
Good Lord that is quite the microscope they have him under! I wouldn't get too worked up about these things. October is still six months away which is a lifetime in politics even for stable countries. Milei's been given a huge lifeline and if he can stay focused, a lot can get done before October.
Click to expand...
The microscope only works for things like this. But when they look for Libra scam they don't look. Funny how that works in Argentina. I hope Milei can succeed. I don't want to see Argentina in a bad situation. I just don't think this time is different from all the other times they have tried with the IMF and failed.
 
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