Domingo Cavallo's analysis after the lifting of the currency controls: "A drop in the official dollar too much would be undesirable."

Former Economy Minister Domingo Cavallo shared his perspective on the economic policies implemented by Javier Milei's government , especially the lifting of the foreign exchange controls and the Central Bank's strategies for accumulating international reserves.

In an analysis published on his blog, Cavallo emphasized that the acquisition of international reserves will favor the country's disinflationary process. " I don't expect inflation to increase with the Central Bank's purchase of reserves, the removal of the crawling peg, and the value of the official dollar within an exchange rate range of between $1,000 and $1,400," the economist explained.

However, he questioned the idea that such intervention would be inflationary: "The Central Bank's reasoning, which maintains that such intervention would be inflationary, is not strictly correct," the economist responded in his analysis of the government's economic policies.

On the other hand, Domingo Cavallo expressed concern about the currency restrictions that persist for businesses, despite the lifting of the dollar restriction for individuals. In this regard, he warned of the risks of the official dollar becoming too cheap. " A drop in the official dollar too much would not be desirable , because it would affect external competitiveness," he warned.

In this regard, the former official emphasized that to avoid an increase in the real interest rate, it is essential to allow an increase in the money supply. According to Cavallo, this increase should be generated through the accumulation of international reserves. "If we want to avoid a rise in the real interest rate, we must allow the money supply to increase," the former Minister of Economy emphasized, emphasizing that this strategy can contribute to stabilizing the economy without compromising the objectives of competitiveness and disinflation.

All these measures and warnings are ignored by the government, which claims that there will be no more inflation in Argentina by June 2026. Furthermore, they maintain that the lifting of the currency controls will be positive for "liberating" the market and that the dollar will soon be unrestricted, one of the conditions the IMF demanded for reaching the recent agreement.