Itaú BBA - Macro Scenario – Argentina: Relying on controls

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Macro Scenario – Argentina: Relying on controls

October 1, 2020

The central bank has tigthtened exchange controls further

For the version with all charts and tables, please open the attached pdf file

The central bank has decided to limit companies from accessing the official exchange rate to pay foreign currency debt (except trade financing). All dollar transactions will be taxed and be part of the monthly purchase quota for households.

These measures may help temporarily to curb the decline of international reserves, but they will come at a cost for economic activity.
The decision, in our view, intends to keep interest rates low and to slow the pace of nominal exchange-rate depreciation until an agreement with the IMF is reached (which should provide markets with a fiscal anchor). We note that without consistent fiscal and monetary policies, more controls are likely. 

We forecast a GDP contraction of 12.0% this year (from -12.7% in our previous scenario) and inflation of 37% followed by modest GDP growth and higher inflation in 2021 (4.5% and 50%, respectively).

João Pedro Bumachar
Juan Carlos Barboza
Diego Ciongo


For the version with all charts and tables, please open the attached pdf file



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