The Minister of Economy Luis Caputo He participated on Wednesday an exclusive seminar for investors Organized by JP Morgan in Washington, where the consultations revolved mainly around the dollar, the new scheme of exchange bandsthe accumulation of reservations and the Structural reforms that the government has in folder.
The event, held in the context of the FMI Spring Assembly -which brings together finance ministers and presidents of central banks around the world -took place in the subsoil of a West End hotel in the US capital. Caputo arrived accompanied by the head of the Central Bank, Santiago BausilI, and by the Secretary of Finance, Pablo Quirnoto expose a hearing of about 200 investors.
Luis Caputo against investors: what said of the dollar, reserves and new government reforms
While the meeting was held under the rules of Chatham House -which prevents disseminating textual statements to promote Franco’s debate -some attendees shared details of what the minister said. According to these sources, Caputo was confident in the direction that the government took: “He will continue working on the reforms,” he said, although he made it clear that many of them – like those linked to the labor, pension and tax regime – could be implemented only after the elections. “We have already prepared them, but we will probably do them after the elections,” he said.
The interest of the participants focused on understanding how the recent exchange band policy announced on April 11 will work. Before consulting whether the Central Bank would intervene buying dollars Inside the band, Caputo was blunt: “No.” And he added: “If nothing strange happens, the natural thing is to go to the band’s floor and thus the scheme is armed.”
In addition, he stressed that the current monetary context is favorable: “The monetization level is low and there is a strong demand for pesos “, He said, and explained that the public continues to use weights for daily transactions and dollars for savings or major purchases. “We are going to give them the opportunity to continue with that.”
In line with what he had already stated in Buenos Aires, Caputo ruled out a total dollarization process, reaffirming the commitment to a bimonary model. As he explained, that system adapts better to the “typical Argentine’s taste” and allows facilitating operations in both pesos and dollars.
Consulted about the demanding goal of accumulation of reservations faced by the government (more than U $ 4,000 million towards June), the minister showed no concern. “If the dollar falls to the floor and we can accumulate, we will accumulate “he said. The fundamental thing, he insisted, is “Continue with the macro order.”
In that sense, the minister remarked that if they can accumulate that total reservations that have as a goal, they will do so, but stressed that They won’t do anything to force the program to meet itadded sources that were present in the official’s dissertation.
He also confirmed that the agreement to establish the band scheme had closed with the IMF in August last year, although its implementation was postponed because the Government requested a greater assistance package. Finally, they agreed U $20,000 millionof which US $ 12,000 million They were disbursed in advance, an unprecedented fact in the relationship with the fund.
This Wednesday was also consulted about the Scott Besent statementsSecretary of the US Treasury, who days before had suggested the possibility of a special loan in the case of an “external shock”. Besent had stated: “I think, if they continue with what they are doing, if they keep the course, I would even be willing to use the exchange stabilization (spher) to soften their adjustment, if necessary.”
Caputo, however, ruled out that there are conversations in motion in that regard. “We appreciate that he said it, but not,” he replied.
This implicit support from Washington adds to the support gestures that Javier Milei’s government has been received from different international actors, in a context where he seeks to strengthen his credibility before the markets and sustain his adjustment plan with political and financial support.
The support of the US Treasury to the Government of Javier Milei
The United States Secretary of the United States, Scott Besenthe said before investors that The White House could give the Argentine government a direct credit line In case there was an international shock.
“If Argentina needs it, in case of an external shock and If Milei keeps the course, we would be willing to use the FSE“Besent said in reference to the United States Treasury Exchange Stabilization Fund.
The statements made them in a closed meeting to investors organized by JP Morgan in Washington.
Specifically, the United States Government would be willing to use the exchange stabilization fund or Exchange Stabilization Fund (ESF), to support Argentina if something that was not his fault happened, as long as Milei maintains the direction of its economic policies, Bessent said, according to the Bloomberg news agency. A treasure spokesman did not immediately respond to a comment request.
At the same meeting he declared that The current tariff confrontation between the US and China is unsustainable and anticipates a decala of the situation.
Although formal negotiations did not begin, Besent expressed optimism about the possibility of reaching an agreement between the two economic powers.
Besent also stressed that the two largest economies in the world are essentially in a state of commercial embargo.
