The former president of Argentina’s central bank Luis Caputo, tipped to be the country’s new Economy Minister, met this Friday (24) with executives from local and international banks to present the economic plans of the elected president, Javier Milei, according to three sources and a banking association.
The meeting at the La Rural conference center in Buenos Aires was held as Milei, who promised “shock therapy” for the struggling economy, works to assemble his economic team.
Caputo has been named as the favorite for the position. However, during the meeting, Caputo refused to confirm that he will be the new economy minister, two of the sources said.
So far, signs that Javier Milei is leaning toward a more orthodox economic and political team have buoyed markets this week, with bonds rising nearly 14% and stocks rising more than 40% since he won the second round of elections last Sunday.
Caputo emphasized the idea of a sudden economic adjustment, necessary to contain inflation close to 150%, avoid an imminent recession, undo a series of capital controls and rebuild liquid reserves, which are negative at around 10 billion dollars.
“Our approach is a fiscal and monetary shock from day one, the script is orthodox and without crazy things,” Caputo told bank representatives, according to a source who attended the meeting.
Caputo did not provide details on how Milei’s government plans to handle public spending or what it intends to do with the central bank’s huge amount of short-term bonds, called “Leliq,” which Milei is targeting because they expand the money supply. of weights.
The former president of the Central Bank of Argentina also said that Milei’s government would lift exchange controls quickly, according to two of the sources, but that this would not happen immediately. He added that no near-term dollarization is planned as fiscal and monetary stabilization was needed, the first source said.
The local banking association Adeba also confirmed the meeting.
“It was a meeting in which we exchanged opinions on the challenges of the economy and how to face them,” Javier Bolzico, president of the association, told Reuters.
“The meeting was very positive, Caputo emphasized fiscal balance as the basis of the model and a comprehensive, market-based approach to the central bank’s interest-bearing liabilities. Caputo’s vision gave us peace of mind and confidence.”
During the presidential campaign, Milei emphasized his plan to close the central bank and dollarize the economy, but admitted that this would take time due to the economic crisis.
Earlier on Friday, he said the closure of the central bank was “non-negotiable”.
Source: CNN Brasil
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