Head of Central Bank Martín Redrado wrote a letter in response to an article published in "The Economist", answering that the official entity "is committed to pursuing a robust monetary policy through the strict control of the growth of the means of payment".
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The article, "Profiting from virtue", mentioned the economic pace of Argentina and Uruguay. "Both economies have slowed sharply after years of rapid growth. That is because the growth in Argentina owed much to expansionary fiscal and monetary polices which caused the economy to overheat", expressed the british media.
"Your article on the economies of Argentina and Uruguay stated that Argentina has pursued an expansionary monetary policy. This is incorrect", replies Redrado.
"Argentina's economy is still cash-intensive, so the power of fiscal and wage policies to affect demand and expectations is predominant. Therefore, it is critical to track the recent evolution of fiscal and wage policy together with monetary aspects when making judgments about expansionary policies", mentioned Governor Central Bank of Argentina.
Furthermore, to help weather the international financial crisis we are building buffers, such as accumulating foreign reserves, and making sure our financial system is solvent and highly liquid. The Central Bank is committed to pursuing a robust monetary policy through the strict control of the growth of the means of payment", said Redrado.
