Luis Caputo, the Minister of Economy in Argentina, presented his views on the impact of policies in central economies on emerging countries at an investor forum in the United States. In a talk about “Leaders in Finance” in Los Angeles, he discussed the “risks and challenges” faced by developed economies and their effects on developing countries. The conference focused on political priorities, investments, and regulatory approaches that can boost growth in the face of pressing economic challenges.
One of the key issues facing Argentina is its exposure to the decision of the US Federal Reserve to keep its official interest rate unchanged at 5.25% to 5.50%, which is the highest level in 23 years. This decision could strengthen the dollar, weaken Argentine agricultural products’ prices, and make debts in dollars more expensive, potentially encouraging capital outflows towards better returns. This situation puts pressure on negotiations with the IMF as Caputo seeks a “new program” and fresh funds of US$15,000 million to lift stocks.
The minister traveled with other officials to participate in a global conference organized by the Milken Institute, where they will engage with a wide range of participants, including former President Bill Clinton, Joe Biden’s regional advisor, and IDB president among others. Locally, however, the government faces cross pressures around its policy of managing exchange rates, liquidity and stocks aiming at avoiding inflation acceleration and reducing Central Bank’s debt but clashes with IMF requests for a different course of action.
Amidst these challenges are critics who question government policies such as Milei being a point of controversy among orthodox economists and former officials. President has defended his position while navigating through economic difficulties ongoing negotiations with IMF. The situation remains complex as Argentina faces significant financial obligations throughout the year.