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ECONOMY | 17-10-2020 10:13

Fernández rules out devaluation, bank-deposit freeze at IDEA

Peronist leader sticks to his guns over government policies, telling business leaders that his government is “convinced that this is the path.”

The 56th colloquium of IDEA (Instituto para el Desarrollo Empresarial de la Argentina) had some special features this year – a unique virtual format due to the coronavirus pandemic (instead of its traditional Mar del Plata venue) and presidential participation, not so unique but highly infrequent in this century.

Urging his virtual business audience to “understand once and for all that we have to work together to rebuild … and develop Argentina,” in headline news President Alberto Fernández ruled out any further devaluation of the peso and any corralito bank deposit freeze, though for some he perhaps aroused fears as much as allaying them with an official denial.

The Peronist leader also stuck to his guns over government policies, affirming that “we are convinced that this is the path.”

“We need Argentina to grow in confidence … and regain democratic co-existence,” he said, complaining about the “aggression, insults and mistreatment” aimed at some politicians at last Monday’s anti-government protest march.

“We’re facing a problem with the lack of hard currency, which we objectively inherited. There is a lack of confidence due to repeating things which are untrue – a devaluation or that we’re going to grab people’s deposits. That’s not going to happen,” assured the president. 

Fernández also ruled out as incorrect the idea that his government “does not care for businessmen,” highlighting policies implemented to protect jobs during the pandemic, such as the ATP wage supplements, which reached 236,000 companies.

Inaugurating the event, the President of the 56th IDEA Colloquium  Roberto Alexander called for “clear ground rules” to be put in place, “rather than refounding the country or starting all over again,” concluding his speech by saying: “I don’t want an Argentina cancelled out.”

Alexander also detailed the colloquium’s focal themes: innovation, education, social integration, competitiveness, institutional quality and an independent judicial system.

Behind the scenes, one unnamed participant from the financial sector downplayed the presidential reassurance and its affect on attendees, telling Noticias Argentinas: “The fear of deposit confiscation exists” and "the less the confidence, the worse the exchange rate, it’s a symptom.”

Another business participant warned that a devaluation would represent "phenomenal carnage," given that "those who have the least suffer most” but expressed the hope: "If he [Fernández] says that he is not going to devalue, he must have some plan."

Various businessmen insisted that a plan with concrete aims would be essential for renegotiating the 2018 stand-by with the International Monetary Fund (IMF). This plan, “which everybody is awaiting,” should drop any “unexpected measures” and convince potential investors.

But looking at the medium term, none of the participants had any idea how long it would take to emerge from the crisis, finding it difficult to imagine an economy creating jobs until then.


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