The Former Minister of Economy, Domingo Cavallo, criticizes EU policy Central Bank and also reveals that it aims to "help prevent the monetary crisis before the elections".
"The monetary base is not the best quantitative guide to influencing inflation, my goal is to help prevent the monetary crisis before the elections," said the official, who also stressed that the monetary policy applied by Guido Sandler Central Bank costs 160 billion pesos each year.
"In short, the $ 160 billion economy is likely to be the cost of bank profitability, but it doesn't seem very unfair that some victims are doing banks, too, given the size of banks, non-banks, large, medium and small businesses," Cavallo.
The departure of the Treasury under Carlos Menem and Fernando de la Ra underlined that "the definition of the monetary base is not conceptually very relevant in all banking systems in the world, including our convertibility, the monetary base is the sum of all monetary liabilities of the Central Bank."
"Since central banks do not issue debts in the form of bonds or bonds at all, the monetary base is the amount of bills and coins held by the company (cash flow), as well as bank reserves (bank notes and coins). More deposits with the central bank.) Always in local currency, understandable, ”he wrote in his personal blog.
"Since the Central Bank issues public bonds (before LEBAC, now LELIQ), the monetary base must include LEBAC and LELIQ stocks as well as the balance sheet operations with financial institutions," he continued.
And he concluded: "The assertion that LEBAC and LELIQ are monetary liabilities paid by the Central Bank and are therefore excluded is not valid." Much of the central bank's banking reserve requirement is also reimbursed in reality. It costs the cost of attracting bank deposits. This problem of defining the monetary base is not just a semantic issue. It has an economic impact on the fiscal deficit"