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ECONOMY | 16-10-2019 08:29

Sandleris asks for 'basic consensus' to ensure Argentina grows

"If we manage to build basic consensus, our economy can leave behind instability and crisis, so that we can begin to grow steadily and begin to lower inflation," declares Central Bank chief.

With just under two weeks to go before a crunch presidential election, Central Bank chief Guido Sandleris has called on Argentina's political leaders to reach a "basic consensus" on policy that would allow the economy to grow and put a lid on soaring inflation.

"I want to give a moderately optimistic message at this time. I believe that the conditions are in place so that if we manage to build basic consensus, our economy can leave behind these situations of instability and crisis, so that we can begin to grow steadily and begin to lower inflation," Sandleris said at a press conference.

Argentina is currently in the midst of a recession that has dragged on since 2018, with one of the highest inflation in the world. Recent official data showed poverty is increasing poverty too, as well as unemployment.

"We have seen that with errors and difficulties, with much sacrifice on the part of all, there has been a correction of the imbalances in these years. We are very close to the primary fiscal balance and external balance," Sandleris said, as he took questions about Argentina's economic outlook, its debt and the government's record US$57-billion credit line with the International Monetary Fund (IMF).

"If we want the economic variables to remain anchored before shocks, we need a basic consensus on the continuity of monetary policies," he declared.

The economic crisis has undermined the popularity of President Mauricio Macri, who is seeking re-election on October 27. In the August PASO primaries, Peronist challenger Alberto Fernández emerged victorious with a 16-point lead.

After the results, the peso plummeted by 20 percent against the dollar, inflation accelerated, Argentnia's country risk index shot up to more than 2,000 points and there were significant withdrawals of dollar deposits.

International reserves, which were in August above US$65 billion dollars, now stand at around US$48 billion as of last Friday.

In order to contain the flight of foreign exchange, the government introduced capital controls and indicated it would seek to "reprofile" Argentina's debt repayments.

"The Central Bank has always taken care of reserves, exchange controls have that objective," said Sandleriss.

"The drop in dollar deposits has virtually stopped and banks are equal to or more liquid than they were before the primaries," Sandleris said.

– TIMES/AFP

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