The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Argentina: Two confessions – not everyone likes them

The country has blown its chances with its monetary mess.

rd_banner_column-780

I am going to confess an unpopular opinion: I am getting worried about Argentina.­

I am also going to confess to embarrassing naivety: I have been testing my hypothesis with the wrong bankers.

But first, my concerns about Argentina. The mess up in monetary policy at the end of last year and the beginning of this one saw a delicate communications challenge around the changes to the central bank’s targets trampled on by the clumsy and damaging decision to accompany this policy change with two 75 basis point cuts to interest rates.

The central bank was beginning to get some traction in its very difficult and long job of bringing inflation down in a country that is synonymous with the phrase ‘unanchored expectations’.

As night follows day, inflation – and expectations of future inflation – have turned reversed and are now rising.

At the very least, the authorities have wasted precious time in getting inflation down to levels where the private sector sees exchange rates and interest rates at stable levels – where investments make financial sense.

Credibility, as the maxim goes, is hard to win and easy to lose.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree