Argentina Considers Managed Exchange Rate After Exchange Controls Lifted
Argentina is contemplating the introduction of a managed exchange rate regime, known as a "dirty float," once it removes its current foreign exchange controls in 2025, according to policymakers. More details on this plan can be viewed at Yahoo Finance.
For the past five years, Argentina has imposed restrictions on foreign exchange and capital market operations, compelling exporters to sell their dollars while preventing companies from sending dividends abroad and curbing individuals from acquiring foreign currency. President Javier Milei and Economy Minister Luis Caputo have pledged to abolish these controls next year but have yet to disclose the currency regime that will follow.
At a recent presentation at Torcuato Di Tella University in Buenos Aires, central bank director Federico Furiase and Caputo's adviser Martin Vauthier hinted at the strategy. "We already designed it but we can't disclose many details," stated Furiase regarding the currency policy. He emphasized that "Argentina has to have limited currency volatility" and noted other nations have reduced inflation with "a managed float that controls currency volatility."
The success of Argentina implementing such a system remains uncertain. Argentina's previous attempts with managed floating exchange rates have yielded mixed results. Caputo's prior intervention as central bank chief in 2018 became unsustainable, and subsequent similar measures also failed to stabilize the peso.
According to Furiase, a prerequisite for lifting currency controls is strengthening the central bank. Additionally, reducing the surplus of pesos held in Treasury debt is crucial to avoid economic strain during the transition.
Martin Vauthier pointed out that most trade restrictions have been relaxed, although Argentine exporters are still required to sell 80% of their foreign earnings in the official spot market. Financial regulations are expected to be phased out gradually. During the transition, the government plans to continue limiting the money supply, encouraging dollar holders to convert their holdings into domestic currency. As a result, the peso has gained strength, allowing the central bank to purchase more dollars, according to the officials.
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1. INTRODUCTION
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2. EXECUTIVE SUMMARY
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3. MARKET OVERVIEW
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4. MOST PROMISING PRODUCT
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10. PROFILES OF MAJOR PRODUCERS
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11. COUNTRY PROFILES
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LIST OF TABLES
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- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
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LIST OF FIGURES
- Market Volume, In Physical Terms, 2012–2024
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- Consumption, By Country, 2024
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- Products: Market Size And Growth, By Type
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- Products: Exports And Growth, By Type
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- Production Volume And Growth
- Exports And Growth
- Export Prices And Growth
- Market Size And Growth
- Per Capita Consumption
- Imports And Growth
- Import Prices
- Production, In Physical Terms, 2012–2024
- Production, In Value Terms, 2012–2024
- Production, By Country, 2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, 2012–2024
- Imports, In Value Terms, 2012–2024
- Imports, In Physical Terms, By Country, 2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country, 2012–2024
- Exports, In Physical Terms, 2012–2024
- Exports, In Value Terms, 2012–2024
- Exports, In Physical Terms, By Country, 2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, 2012–2024