"Chronicle of a devaluation foretold": Javier Milei criticized for his use of the exchange rate.

Renowned macroeconomist Roberto Frenkel , one of the founders of the historic Austral Plan , harshly criticized the economic management of Javier Milei 's government. The specialist stated that the current administration squandered a unique opportunity to implement a successful stabilization plan. He also severely questioned the use of the exchange rate as an anti-inflationary tool and warned of the serious consequences of this strategy.

Frenkel, who is president of the Center for State and Society Studies (CEDES), stated: "Trying to lower inflation using the exchange rate as an anchor ends up generating a currency crisis." The economist emphasized that the central problem of the current situation is the uncertainty generated by the lack of a clear plan . In this regard, he asserted that "the government can announce all the support it can get between now and October 26, but what it should announce is what will happen to the exchange rate on October 27."

The economist maintained that "it is clear to everyone that the ceiling of the band is overdue," as evidenced by the high demand for dollars. He described the current exchange rate policy as "unsustainable" and warned of its structural risks. Interviewed by the newspaper Clarín, the former consultant to international organizations emphasized that the strategy of anchoring the exchange rate generates an "expansionary effect" that appreciates the currency and, over time, causes a current account deficit and a potential currency crisis when the balance of payments becomes deficient.

Regarding Javier Milei's administration, Frenkel stated that the President had an "ideal situation to implement a successful stabilization plan" due to the broad initial support and lack of opposition, which would have allowed him to seek consensus for a "socially sustainable" fiscal adjustment. However, he criticized the government for "placing the entire adjustment on retirees and public employees, universities and hospitals, and transfers to provinces," the simplest way to close the deficit, but one that ends up generating "social intolerance."

Frenkel maintained that an exchange rate correction is inevitable, considering the situation to be " the chronicle of a devaluation foretold ." He indicated that even the International Monetary Fund ( IMF ) observed that the situation could not be sustained, which led to the introduction of exchange rate bands in April, albeit unsuccessfully. The economist emphasized that "we don't know what regime there will be, but there will necessarily be a devaluation" after October 27, and therefore anticipated a "continuous demand for dollars" from the market until that date.