“You have to take the dollar to 40 pesos” and other strong definitions of Cristiano Rattazzi

August 28, 2018 - By Joseph Taylor

The businessman Cristiano Rattazzi, head of Fiat-Chrysler, left strong definitions about the country with criticism of the government’s economic scheme, although supporting it in the face of the 2019 elections: interest rates, the exchange rate, the value of the peso against the dollar, the labor reform, inflation, the Mercosur and the presidential ones.

Rattazzi, first, questioned the interest rates that, despite having had a slight fall on Wednesday, still above 70% (today closed at 70.05% and carries an increase since January – the so-called YTD– of more than 40%).

“The interest rate is absolutely absurd, how are you going to have a rate of 70%? It is clear that inflation is high and they had to lower it very fast, but the fear was that it could happen to the dollar that they do not dare to lower a bit more and put it in the forecast of inflation, at 45%, “Rattazi told LN +.

In other words, for the businessman the Government of Mauricio Macri takes “fear” rates at that level to attract investors and so that they do not go to the dollar, which would increase the demand for the currency and its consequent go up

In that sense, Rattazzi raised it directly: “The country has accepted a bit that the dollar is worth 40 pesos, it would have to loosen up a bit and go to 40 and that at that price it can be stabilized enough, it can turn inflation down.” He added: “We have to separate the dollar from what is the cost of living.”

Regarding inflation, he said: “Inflation is a drug because you use it, you emit, you create a sense of wealth, like a drug, you create euphoria, you give more money, but it is false”. Although he clarified: “It is complicated to eliminate it”.

The head of FIAT said then that “gradualism in principle is seductive (sic), it’s nice, but gradualism then becomes so gradual that afterwards no progress is made at all and one day the market said: ‘I do not believe you anymore ‘”

 He explained it in reference to the currency exchange of months ago: “The market certainly gave a good demonstration in April, it was quite organized for that to happen”. In other words, he said that the Government should not have sustained the price of the dollar by selling Reserves, so he called it “naive”.

“If you think the dollar was 20 pesos and everyone knew that it was late, they had also imposed a tax on the foreigners who had bought Lebacs, such was the shock of those 7 billion that came out, that the Central Bank, instead of Realize that he was changing everything, he bought with genuine dollars of reserves all that money that came out, keeping the value of the dollar at $ 20/21 “, he developed.

He added: “A few days later the dollar went to $ 25. In those things they are a little naive, we have to be a little less naive, the market is the market, the market is not naive, it smells blood, so is the world The world is cruel, but there are the strongest companies and the strongest salaries. “

Regarding the future, he stated that “it is time” to make the labor reform: “The labor reform is very useful to eliminate litigation and, secondly, because it is necessary to whiten as quickly as possible so that people can go to the target and help anyone puts blank people in quality jobs (we are only private companies that we can give quality jobs). “

Rattazzi, finally, was also consulted about the possibility of a triumph of CFK in 2019: “Everything can happen, but I see it difficult, very difficult, the situation is tremendously difficult, but at least the country is changing”.

Finally, regarding the vision of the far right Jair Bolsonaro on Mercosur, he said that “the policy of a country more inserted in the world, more open, more competitive especially serves Argentina.”

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