Argentine President Javier Milei announced on Monday (3) in an interview with local La Nación +, which intends to eliminate current exchange rate control, which restricts access to dollars in the country since 2019.
He mentioned that if he gets a new deal with the IMF, this change could occur before.
Currency control, known in Argentina as “currency census”, limits the availability of dollars, which are seen as a safe value in an economy where local currency has faced significant loss of purchasing power due to one of the highest inflations of world.
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The president is in negotiations to sign a new agreement with the IMF, regarding a $ 44 billion loan taken in 2018. In addition, the government reduced the “Crawling Peg”, which consists of small daily devaluation, from 2% to 1%. Milei said in November that this measure would be an initial step towards eliminating currency control.
For Bradesco BBI, this measure would continue to support the virtuous cycle that the market has so far shown with the continuous deceleration of inflation, acceleration of activity and credit, negotiations with the IMF, among others.
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“Although the date is farther than the market expected and, although it could be earlier, the statement puts an end to discussion about when and if this control would be eliminated,” the bank evaluates.
The high level of growth of the Argentine economy would be the next key point of the discussion due to distortions between the sectors of economic activity.
The BBI also points out, in another report that, it is the date to be farther than the market expected, it can be anticipated depending on inflation and exchange rates.
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“For our universe of coverage of Latin American oil and gas companies, this news must be beneficial to YPF and Vista oil and Vista, as it provides greater stability for dividend payments and will probably boost a greater supply of probes in Argentina, which It should help reduce drilling costs, ”he says.
For Raízen (), change can also provide the necessary conditions for the sale of its fuel operation in Argentina, which would clearly help the company’s breakdown efforts, the bank points out.
(with international news agencies)
