Moreover, the central bank, once freed from the duty of pegging the peso to the dollar, is likely to validate the depreciation in the peso with monetary policies that will lead to lead the nation into a period of hyperinflation.
I have steadfastly advocated freely floating exchange rates for countries large and small.
Still for Argentina, especially without any material change in the quality of financial and economic leadership, dollarization is the best choice, at least for now.
David DeRosa, president of DeRosa Research & Trading, is also an adjunct finance professor at Yale School of Management and the author of In Defense of Free Capital Markets. The opinions expressed are his own.
RSS