Argentina May Unify Exchange Rates Dec. 14, La Nacion Reportsby
Argentina may create a single exchange-rate regime as soon as next week after the new government takes power, incoming Finance Minister Alfonso Prat-Gay said, according to newspaper La Nacion.
The decision will take place Dec. 14 unless certain conditions aren’t yet satisfactory, Prat-Gay told a group of local reporters in Buenos Aires, La Nacion reported on its website Sunday.
“If we can do it on the 14th, we’ll do it on the 14th, and if not, then when conditions are adequate,” Prat-Gay said, according to La Nacion. “We are going to fulfill this promise as soon as possible and as clearly as possible,” he said.
In order to lift foreign-exchange controls, the incoming government wants to see new management at the central bank, Prat-Gay said, because the government’s goals differ from the decisions implemented by current policy makers. “The unification of the exchange market will be the first signal for the economy to start normalizing,” he added.
President-elect Mauricio Macri, who takes office Dec. 10, pledged during the campaign to remove import restrictions and currency controls and let the peso float freely on his first day in office.
Investment banks such as Morgan Stanley favor an immediate correction in the exchange-rate regime. In a report to investors last week, the bank said that “although many Argentina watchers are calling for deferment of the exchange-rate correction, we think that a one-off, early adjustment is the preferred option.”
Argentina’s international reserves fell $24 million on Dec. 4 to $25 billion, the central bank reported. Argentina is currently in default on about $28 billion of foreign-currency bonds after U.S. District Judge Thomas Griesa blocked the country from making payments on the debt until it settles with a group of hedge funds including Paul Singer’s Elliott Management and Aurelius Capital Management.