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Now the Central Bank's strategy is to use the dollar as an anchor to lower inflation

The results, in the case of a successful policy, would become visible in May. After 3.8% in February, March inflation starts with a floor of 3% and something similar happens in April, due to the accumulated increases in public services.

But in addition to the slower adjustment of the exchange tires, the head of the Central, Guido Sandleris, announced two other measures to consolidate the stability of the dollar in the coming months. And they are the following:

– The very counter-bias of monetary policy is reaffirmed by maintaining the "zero-emission plan" until the end of the year. This measure attempts to reduce the amount of market weights and at the same time maintains high interest rates. While it should in itself be an important tool to lower inflation in the coming months, it is primarily trying to reduce the demand for dollars. With few pesos on the market and high returns in local currencies, the goal is to minimize portfolio de-polarization in the months prior to the elections.

– There is no risk of returning to a scenario of overdue payments. That was another concept that Sandleris emphasized in his speech yesterday. In other words, The dollar has a wide margin to rise less than inflation from now to the future. "The exchange rate today is almost 60% above the level it had before the shares were canceled", he pointed to graph it.

– The Treasury sells USD 60 million per day to insure the delivery of foreign currencies to the foreign exchange market. To the Central Strategy, the announcement has been added that a few hours for the Minister of Finance, Nicolás Dujovnefrom Washington. So It seeks to meet the increasing demand for dollars that will inevitably occur in the months preceding the election.

The economic team seems to be clear that achieving inflation is falling more clearly, not just to prevent central finances from financing the Treasury or raising interest rates. Another essential condition is to keep the exchange rate under control.

A strong leap from the dollar due to the uncertainty of the elections would inevitably lead to an automatic transfer to prizes. And in those circumstances, it will be much harder to show favorable data. The most recent market expectations survey showed that analysts expect inflation to fall to 2% in July. And this is possible as long as the dollar moves little, in line with the "exchange rate council" that determines the evolution of the exchange rate floor.

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