Miguel Kiguel Warned About the Future of the Dollar: How Official Intervention and the Continuity of the Currency Controls Impact It

Economist Miguel Kiguel warned that the stability of the dollar throughout 2026 is due to a deliberate strategy of implicit intervention, designed to anchor inflation expectations at the cost of delaying exchange rate parity.

During a conference for the IAE Business School, the economist detailed why the continuity of currency controls raises doubts about the sustainability of the current scheme. For Kiguel, the inability for the dollar to float freely under the law of supply and demand distorts price formation and leaves open the question of what the true equilibrium value is.

Kiguel warned that the stability of the dollar throughout 2026 is due to a deliberate strategy of implicit intervention

Reserves in Focus

The economist pointed out that, although the current level of net reserves, which is around $9.5 billion, is far from ideal, the figure contrasts sharply with the starting point of Milei's administration, which inherited a deficit close to $11 billion in the negative.

Despite this progress, Kiguel indicated that more effort is needed to achieve a robust reserve position. "Argentina should have between $50 billion and $60 billion," he specified. In that sense, he considered that the Central Bank manages to buy foreign currency, but at rates he qualifies as "low."

Miguel Kiguel warned that the reconstruction of the Central Bank's balance sheet will take time: "Obviously, this cannot be achieved in one year, nor in two, nor in three, but for many years we will buy many dollars. And to buy them, a higher exchange rate is needed," he indicated.

Doubt about the dollar: Kiguel warns that the currency controls hide the real value of the currency.

The Currency Controls

The economist then focused on an aspect he considered central: "There is another element that also raises doubts about whether the exchange rate is correct, and that is that the Government has not yet eliminated the currency controls."

For the specialist, the refusal to dismantle the currency controls clashes directly with the triumphalism of the official discourse. If the macroeconomic fundamentals were as solid as the Executive claims, the elimination of currency restrictions should be the natural step and not a risk that is indefinitely postponed. "* If everything is so good, why doesn’t (the Government) remove it? What do they see that we don’t?** *" he insisted.

In that context, he stated that the main danger for the exchange rate does not lie in a gradual increase, but in a sudden "jump" in its value, as it would trigger the demand for dollars. "Nobody buys dollars now that it is stable, which is when they should. Everyone buys when it goes up," he described, referring to the usual behavior of savers.

To conclude his diagnosis, Kiguel focused on the recent increase in country risk and linked it directly to the political uncertainty generated by the emerging electoral scenario leading up to 2027.

Kiguel focused on the recent increase in country risk and linked it directly to the political uncertainty generated by the emerging electoral scenario leading up to 2027.