Yeah, there seems to be a lot of shit going around it. RT was claiming he "devalued the currency by 56%" but I don't know if that means he spiked inflation (which I doubt), or he caused deflation which they are intentionally misconstruing as "devaluing".
Yes, there's also some former big shots in American finance running the treasury, but it's one of those things where if you're going to lean into the Americans, they probably want to re-order enough of the financial sector to get their money back, and completely dissolving the central bank might have gone down as a non-starter.
I don't envy the situation he's in, and although I'd love him to go full Ancapistan mode, he seems to be navigating it appropriately. Especially with a war-hungry US leering over his shoulder.
There was what the government said their money was worth, their official rates and what you allowed to trade, and the actual exchange rates on the market, what people actually traded.
He immediately moved to 'devalue' by 56%. As in recognise reality and what the money is actually worth, 800-1000 or so to the dollar, rather than the previous admin's bullshit of 400 or so. Now you don't have to go through the black market or various intermediaries or do loads of bullshit to trade your money and do other trades.
What had happened is the lefties had inflated the fuck out of it, but their official rates looked 'good' cause they set a bullshit official exchange rate, so the peso looked stronger than it actually was. This is just recognising reality and allowing fair trade.
Now as I understand there is also a plan to keep going though, devaluing at like 2% per month. Which is still quite high. Pursuing a kind of chinese style export focused model where your cheap currency helps your exports look attractive, and some other effects.
I don't necessarily agree with that part, but the initial recognition of reality is definitely needed.
So what specifically does "devalue" mean in this case? Did he free up the markets to decide on the value of the money as the result of some policy change? I don't get it. Was there some sort of value cap established by treaty?
Now as I understand there is also a plan to keep doing this though, devaluing at like 2% per month. Which is still quite high. Pursuing a kind of chinese style export focused model where your cheap currency helps your exports look attractive, and some other effects.
I'm guessing that he wants to keep making exports cheap to sustain the industries long enough to repair them, but also knows that if he properly stops devaluing, he might actually get uncontrolled deflation. Which, although inevitable, you still want to try and limit.
Yeah, there seems to be a lot of shit going around it. RT was claiming he "devalued the currency by 56%" but I don't know if that means he spiked inflation (which I doubt), or he caused deflation which they are intentionally misconstruing as "devaluing".
Yes, there's also some former big shots in American finance running the treasury, but it's one of those things where if you're going to lean into the Americans, they probably want to re-order enough of the financial sector to get their money back, and completely dissolving the central bank might have gone down as a non-starter.
I don't envy the situation he's in, and although I'd love him to go full Ancapistan mode, he seems to be navigating it appropriately. Especially with a war-hungry US leering over his shoulder.
There was what the government said their money was worth, their official rates and what you allowed to trade, and the actual exchange rates on the market, what people actually traded.
He immediately moved to 'devalue' by 56%. As in recognise reality and what the money is actually worth, 800-1000 or so to the dollar, rather than the previous admin's bullshit of 400 or so. Now you don't have to go through the black market or various intermediaries or do loads of bullshit to trade your money and do other trades.
What had happened is the lefties had inflated the fuck out of it, but their official rates looked 'good' cause they set a bullshit official exchange rate, so the peso looked stronger than it actually was. This is just recognising reality and allowing fair trade.
Now as I understand there is also a plan to keep going though, devaluing at like 2% per month. Which is still quite high. Pursuing a kind of chinese style export focused model where your cheap currency helps your exports look attractive, and some other effects.
I don't necessarily agree with that part, but the initial recognition of reality is definitely needed.
So what specifically does "devalue" mean in this case? Did he free up the markets to decide on the value of the money as the result of some policy change? I don't get it. Was there some sort of value cap established by treaty?
I'm guessing that he wants to keep making exports cheap to sustain the industries long enough to repair them, but also knows that if he properly stops devaluing, he might actually get uncontrolled deflation. Which, although inevitable, you still want to try and limit.
literally just changing the official exchange rate to make it reflect reality