In an unexpected twist, Mario Blejer, a 75-year-old former head of the Central Bank during the 2002 crisis, has expressed his approval for Javier Milei’s leadership in reducing the deficit and dropping inflation. Despite the rise of the dollar, he believes that President Milei is right to avoid devaluation and rapid disarmament of stocks. Looking back at his time at the IMF and the transition between De la Rúa and Duhalde, he sees striking similarities with the current stage but still opposes dollarization.
When discussing Milei’s claim that there is no exchange delay, Blejer acknowledges that while the dollar has moved less than salaries, it has created a delay. He cautions against devaluing as it may solve the dollar’s lag but will lead to more inflation and create expectations of failure. Instead, he emphasizes the need for rational measures and creating a positive investment environment to achieve a new balance.
Blejer advises against celebrating a decrease in inflation too soon, urging a focus on core inflation instead. Core inflation indicates a more direct relationship with monetary and fiscal policy. He argues that government success depends on achieving a new balance without high poverty rates or severe economic disruptions.
Regarding government intervention in lifting stocks and addressing market imbalances, Blejer suggests careful intervention in the exchange market to prevent causing a crisis. He emphasizes negotiation and coalition governments as crucial to navigating complex economic challenges effectively.
In discussing potential dollarization plans and unsustainable adjustments with vulnerable sectors, Blejer stresses strong leadership and pragmatic measures to achieve long-term stability. He warns against drastic changes like dollarization and highlights maintaining balance and stability in the economy through thoughtful policies and negotiations as essential for sustainable growth.
In conclusion, Mario Blejer has expressed his support for Javier Milei’s leadership in improving Argentina’s economy while still opposing some aspects such as dollarization. His insights offer valuable guidance on how Argentina can achieve long-term stability through thoughtful policies and negotiations rather than drastic changes that could destabilize its economy further.