Argentine Bank Association (ADEBA, its Spanish acronym) president Javier Bolzico questioned the idea of “dollarizing” the economy, one of the main proposals of far-right presidential candidate Javier Milei.
“We Argentines can and should have a stable currency. Dollarizing would mean resigning ourselves to the fact that as a country we cannot do things right, in order to have a reliable currency,” said Bolzico in a speech for Argentina’s journalist day given at the Banco Galicia headquarters in downtown Buenos Aires City.
The president of the entity that groups Argentine capital banks said “the efforts needed to implement a successful dollarization are the same as those needed to have a stable currency.” Bolzico told the Herald that dollarization exposes the country to the impacts of international shocks.
Talks about the possibility of dollarizing the Argentine economy have been prompted by libertarian economist Javier Milei. His proposal of “dollarization” includes the closure of the Central Bank, the abolition of the peso, and using the US dollar as Argentina’s official currency. He announced the idea at the Llao Llao Forum in April as part of the “Chainsaw Plan,” the name he’s chosen for his economic program.
With the exception of some sectors who are sympathetic to Javier Milei, the rest of the political forces do not agree with dollarization as a way of achieving macroeconomic stability in Argentina. For example, the think tank Fundar wrote a report analyzing the dollarization proposal, its Economic Department Director Guido Zack telling the Herald that dollarization is “not only undesirable, but also impossible in the current Argentine context.”
In addition to rejecting dollarization, the Argentine banks called for “lowering spending to levels that would allow a reconstitution of fiscal solvency”, “eliminating distortionary taxes” and regulations on lending and deposit interest rates levels in the Argentine banking system, which are currently heavily intervened by the Central Bank.
UVA credits, a type of inflation-adjusted credit, were also mentioned. Bolzico rejected the treatment of a law in Congress that seeks to favor those who requested this type of credit to buy their homes, saying that, if changes were approved, it would be a violation of “legal certainty”.