Julio Velarde, president of the BCR, draws applause from Argentines fed up with inflation

The president of the board of directors of the Central Reserve Bank of Peru, Julio Velarde Floresdrew applause this Wednesday from an auditorium of businessmen in Argentina, a country that suffers very high inflationexchange restrictions and multiple types of exchanges.

“We are self-employed“said Velarde while receiving the first applause during his participation in the 59th Colloquium of the Institute for Business Development of Argentina (IDEA), held in Mar del Plata, after listing the restrictions to establish differentiated exchange rates, between others, which describe the legal autonomy of the Peruvian central bank.

Julio Velarde He has been president of the board of directors of the Peruvian Central Bank since 2006 and in 2021 he was ratified until 2026.

The banker was summoned to talk about the importance of the independence of the Central Bank and how it has allowed the country to maintain monetary stability despite political instability.

In Argentina, the lack of genuine financing of the fiscal deficit has caused the Treasury to turn to monetary financing from the Central Bank, and inflation reached 124.4% annually last August.

Julio Velarde He recalled that Peru suffered hyperinflation, which “did so much damage” and that the country came to have 34 different exchange rates: “There comes a time when it was obvious that it had to be fixed in one way or another.”, he said.

Peru went 36 years without growing, he added, and “That marks the social pressure for the Government to be prudent.”.

Julio Velarde described that today the goals are 2%, plus or minus one point, and that “there is a (fiscal) deficit, but it is manageable”.

“We are the country in the region that has the lowest inflation, even lower than Ecuador in this century“, he pointed.

The moderator of the talk, the general manager of Banco Galicia, Fabián Kon, did not ask him about the dollarization plans of the Argentine far-right candidate, Javier Milei.

Nevertheless, Julio Velarde He got laughs when he said that Peru has a unique exchange rate, because “a dollar is a dollar”, in a country like Argentina that has multiple exchange rates as a result of the strong restrictions on accessing the official exchange market.

The other applause went up when Julio Velarde He said that Peru is one of the few countries that establishes in its Constitution the free possession and availability of savings in foreign currency: “I believe that the money belongs to the citizen and the citizen decides what currency he wants and where he has it.”.

The banker told how he was grateful for accumulating a level of reserves that allowed him to face a capital flight of 8% of GDP in 2021 and avoid any exchange controls.

The last applause broke out after Velarde will leave a message of encouragement to Argentina that is fighting against three-digit inflation: “Can. All his neighbors have done it. Can be done”.