Re: Argentina´s currency

["Todeschini Federico" <todeschinisat@xxxxxxxxxxxxxxxxxxx>]

>As somebody else pointed out, though, trade is only a part of the
>equation. That the real is not included in the prospective basket owes to
>this, I think, and to the fact that the real is just too unstable, there
>not existing any signal that the Brazilian government ia going to tackle
>that problem in the short run.

If Argentina is going to put the real in the basket, why doesn´t Mr. Cavallo float the currency instead. I think it will have the same result.



>
>On Wed, 25 Apr 2001, Todeschini Federico wrote:
>
>>
>> The "new" currency board will function like this: As soon as 1 ? = 1 U$S the Argentinian peso will be worth half dollar plus half euro in a simple arithmetical sum.
>>
>> So the value of the peso won´t fluctuate with the values of the ? and u$s. This will give a bit of "competitive" gain, because the value of the changes in the value of the dollar against the ? will be compensated.
>>
>> The matter is that our larger tradable area, the Mercosur, won´t be included in this board so we wont be able to compensate the depresiation of the real
>>
>> Atilio Todeschini
>>
>
>