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Mark Rosen, former U.S. consultant to the International Monetary Fund (IMF), has endorsed the concept of Argentina adopting the U.S. greenback as its official forex to fight hovering inflation charges, a transfer that has been broadly criticized by mainstream figures. Rosen, who served on the IMF’s govt board from 2019 to 2021, expressed his perception on Thursday that such a transition may considerably cut back Argentina’s danger of future inflation, as reported by Bloomberg.
Presidential candidate Javier Milei, at present main within the polls, has pledged to dollarize Argentina’s financial system if elected. Despite this, his proposal has been met with skepticism as a consequence of an absence of key particulars such because the required greenback supply, the trade fee for the transition, and an implementation timeline. Alejandro Werner, a former IMF official who labored on Argentina’s program, dismissed Milei’s proposal as “impossible.”
Rosen joined the IMF in 2019 when it loaned a document $57 billion to Argentina’s earlier authorities below President Mauricio Macri. However, solely $44 billion was used earlier than an financial disaster led to Macri’s defeat within the 2019 election. The program was subsequently deserted in favor of the present cope with President Alberto Fernandez’s administration.
The way forward for Argentina’s $44 billion IMF settlement, the biggest within the historical past of the Washington-based monetary establishment, hinges on the financial coverage of the subsequent authorities. The present administration has persistently failed to fulfill targets as a consequence of funds overspending and has sought to renegotiate this system. This scenario locations vital strain on the incoming authorities to plot a reputable plan that secures IMF approval.
Rosen’s profession spans 4 a long time in funding banking, together with a concentrate on Latin America. He is at present a associate at Advection Growth Capital in New York. He contends that dollarization may gain advantage Argentina, infamous for its fluctuating insurance policies and an inflation fee exceeding 124%. However, Rosen emphasizes that the important thing problem lies in how Milei plans to finance his dollarization technique.
The IMF has not but formally commented on Rosen’s statements or Milei’s dollarization proposal.
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