Friday, March 24, 2023

What was the Bonex plan and why does it reappear as the “magic” solution to the economy?

In turn, financial institutions were barred from receiving fixed deposits until further notice. But this strategy, monetarist, by the way, produced profits and results.Seizures reached 60% of the monetary base, leading to a strong slowdown due to declining liquidity. However, it managed to contain hyperinflation “as a shock” due to low demand for goods and services, in addition to dollar purchases.

Those who clearly lost were the holders of fixed terms. A new measure that attempted to protect its savings against Argentina in its currency. However, this policy was not able to sustain itself remotely: rumors of corruption created a new instability and inflation accelerated again. This led to the resignation of Ermán González in January 1991, and Domingo Cavallo taking over – he says, the ideologue of that idea – who launched the convertibility plan.

Is this strategy viable today?

The market is dealing with possible crisis scenarios, but extreme measures such as a hyperinflationary outbreak or a “bonex plan” are ruled out.”, i.e., “cleaning up” of the liabilities of the Central Bank through the delivery of bond In the long term for savers that occurred in December 1989.

For economist Daniel Marx, “nominal deposits are relatively constant, even in real terms” and explained that “The central bank loan is at a fixed rate, so the government will not need to go to the bonex scheme.”

Economist Roberto Kachanowski did not reject it and considered it “probable in the event that the dollar’s flight is stressed” and it has been decided “not to continue”.

“I don’t think they mess with safe deposit boxes, but in the event there might be such a thing as Plan Bonex fly towards the dollar“, he predicted in conversation with Fundación Libertad.

According to the analyst “the implementation of this measure will be marked”run degree“which leads to Central Bank of the Republic of Argentina (BCRA) To finance the exchange of Leliqs solicited by private entities.

“In the event that the flight of the dollar is insisted upon, the deposits are withdrawn from the banks and they have to ask the Central Bank for pesos for lelic, there they must issue them and if it issues pesos So it would generate a hyperinflationary flare,” the professor explained.

And he added: “That’s why they have to choose between hyperinflationary flair or bonex plan banking.”

Nation World News Desk
Nation World News Desk
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