Headline:
Economist Orlando Ferreres: Dollar Should Be Around $1600, Not $1370
Article:
The dollar is 23% undervalued based on costs, says Orlando Ferreres, economist and director of OJF & Asociados. He joined the chorus of voices calling for a dollar correction, with the controversial figure of Domingo Cavallo suggesting a 20% increase. Ferreres jokingly remarked, "I must be an ‘econochanta’ or a ‘mandril’ ( instrumentos of the柰devil)" due to his stance contrary to some of Milei’s recurrent expressions.
In an interview with Juan Amorín on Minuto Uno, Ferreres reaffirmed, "The dollar should be around $1607 today from a cost perspective, not a financial one." This calculates the parity "that should be followed, not the financial one that some others mention," he added, tongue-in-cheek.
Ferreres explained that the current dollar value reflects financial conditions and the Argentine government’s privileged purchases of dollars due to surpluses in energy, agriculture, and mining sectors, as well as the effects of capital amnesty operations. However, he insisted that the current value doesn’t reflect production costs, given that Argentines traveling to Brazil spend more pesos for fewer reals.
Regarding Milesi’s promise to lift the dollar’s unofficial ‘cepo’ (cap) once the Electoral Tribunal recognizes his win, Ferreres treaded cautiously, "That’s a tricky matter, given the financial complications and the need to pay debt," he said.
In recent days, President Javier Milei has lambasted Domingo Cavallo for warning about the dollar’s undervaluation. "I find it shocking and poorly argued technically," Milei retorted. "The market will find its own equilibrium," he added, rejecting calls for a dollar adjustment.
On the potential for unprecedented political, economic, and social challenges in 2025, Milei forecasted steadfast confidence in Argentina‘s future, predicting the end of the ‘cepo’ and the dollar, along with a 10% GDP growth, unemployment at 6%, and a 20% reduction in income tax.
