Weekly Report - 19 July 2012 (WR-12-28)

The government may deny that a mass devaluation is on its way but, according to the markets, it is already underway. This week a former minister of economy, Domingo Cavallo (1991-1996 and 2001), said the government is heading for a “corralón” – a clear reference to the “corralito” imposed after the massive devaluation that put an end to his convertibility plan. Making matters worse, Cavallo also said that “the only economist who could get the [government’s] potatoes off the fire, but with few probabilities of success, is [former minister of economy Roberto] Lavagna [2002-2005]”.