Argentina’s central bank (BCRA) released policy guidelines aimed at increasing the monetary supply, avoiding major exchange rate fluctuations, and reducing inflation. The monetary policy will support a managed exchange rate float to avoid sharp fluctuations in the value of the currency and will promote a “prudent expansion” of the monetary supply, the bank said. If needed, the bank will assist the Treasury regarding external debt payments.
Argentina’s peso, the world’s worst-performing currency against the dollar in nominal terms in both 2018 and 2019, has nowhere to go but down, according to Gabriel Gersztein, the Sao Paulo-based head of global emerging-markets strategy at BNP Paribas SA. He predicts the peso will reach 100 pesos per dollar by the end of 2020, a 40% decline from the official rate now.