A man from Nicolás Dujovne arrives at the Central Bank and the government hopes to close the agreement with the IMF

September 26, 2018 - By Arturo Altman

Guido Sandleris is the new president of the Central Bank. He replaced Luis Caputo, who was in charge of the entity for about three months. “It is an honor for me to assume the Presidency of the Central Bank of the Argentine Republic and I want to thank the confidence that President Macri had in me to face this new stage,” were the first statements by Sandleris through an official statement.

Then he mentioned a more specific role for his work: “The main objective of the Central Bank is to reduce inflation”. In three weeks Sandleris will face that test: it will be when the Indec publishes the September figure. Elypsis estimates 7% for that month.

But before another test awaits: stabilize the dollar. But not in any way, but as stipulated by the agreement that his former boss Nicolás Dujovne wishes to announce this afternoon as he advanced from New York the Economy Minister on Tuesday.

The stand by which Economía seeks to announce would establish a floating band between two values, among which the price of the dollar would oscillate, thus leaving behind the experience of the floating exchange rate signed by Federico Sturzenegger in June.

Sandleris assumes the leadership of the monetary authority after working with Dujovne in the ministry since 2017. Since mid-year he was his deputy minister. He previously worked at the Federal Reserve of Minneapolis, the Central Bank of Chile and the IMF itself.

The current number one of the BCRA was a key negotiator with the agency in these months. First in the conversations that took place in May and ended in the stand of US $ 50,000 million announced in June. Then, and more here, for the negotiations of the current agreement that will include an extra amount of the IMF to the US $ 50,000 million.

“I am convinced that we have appointed a very good professional,” said Mauricio Macri on the figure of Sandleris. He added: “He was part of the team and has the respect and has negotiated the new agreement with the IMF. Not like Caputo did. “

The President referred in this way to the discomfort that the former head of the bank manifested lately inward and at the time of curbing the exchange rate tension with the tools that had been signed by his predecessor in office. Specifically, under that document, Argentina had to meet a reserve target: if the monetary authority used the currencies to mitigate the fluctuations of the exchange rate, the chances of breaking the program according to Caputo’s vision increased.

With the appointment of Sandleris, the leadership of the Central Bank that must comply with the exchange and monetary guidelines of the program remain under the same head that negotiated the plan.

For this Wednesday the publication of the decree of designation of the new head of the BCRA in the Official Gazette is expected. Also the sending of your statement to Congress.

Sandleris is the third president of the Central Bank during the Macri government. The two changes at the head of the monetary authority’s leadership have been concrete since the negotiation with the IMF began and governs the program agreed in June.

Caputo was in charge of the Central Bank just over three months. During this period, the dollar rose 37%, basically due to the devaluation registered in August when the exchange rate went from $ 28 to $ 38. In their environment they argue that turbulence in Turkey, the cause of the K notebooks and the conditionalities of the program with the Fund when intervening, removed the ability to stabilize the dollar.

The agreement between Argentina and the IMF was closed at the technical level. To the negotiation on the part of Dujovne-Sandleris from the Argentine side, the one of Gustavo Cañonero was added, who will continue like vice-president of the BCRA.

Cañonero meets the IMF’s interlocutors: he was a university partner in the USA. by Alejandro Werner, the director of the IMF’s Western Hemisphere Department. On Tuesday, the agency’s monetary authority continued monitoring the situation. In May, President Macri announced that Argentina would go to the IMF.

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with our FREE daily email newsletter.