Domingo Cavallo once again attacked the currency controls and warned of a slowdown in the economy: "I'm worried about the siren calls."

Domingo Cavallo reappeared with a new analysis on his personal blog and reiterated the need to completely eliminate the exchange rate controls . The former head of the Ministry of Finance criticized the restrictions that still remain, warned about the impact of the exchange rate lag, and questioned the slowdown in economic activity.

According to his assessment, the market liberalization process remains partial. While access to the official dollar has been enabled for individuals, businesses are still unable to operate normally, which impedes fluid foreign exchange intermediation. " The government should not fear the complete liberalization of the foreign exchange market or the elimination of all vestiges of financial repression ," Cavallo stated.

For the former official, one of the current obstacles is that the Central Bank is not intervening with purchases of peso reserves, something that, in his opinion, is hindering the remonetization process . Within this framework, he maintained that fiscal balance should serve as a sufficient anchor to guarantee macroeconomic stability and allay fears of a complete opening.

Cavallo believed that lifting controls could benefit both the peso and the dollar. In his view, this would help reduce uncertainty and allow for a drop in real interest rates , which would be crucial to reactivating the economy and supporting sustained growth.

The former Minister of Economy also returned to a topic he considers key: the overvaluation of the peso . In his opinion, maintaining an artificially low exchange rate creates a structural problem for production and exports. He warned that trade liberalization without a currency adjustment could leave domestic industry exposed to aggressive external competition.

" I'm concerned about the siren song that maintains that because there's a free float and the Central Bank isn't issuing reserves to buy, the exchange rate is appropriate ," he warned. In his view, it's essential to correct distortions before moving forward with economic opening. Otherwise, the rebound in the external sector could have negative effects on local activity.

Cavallo also addressed the global outlook. He noted that many exporting countries are resorting to below-cost prices as a strategy to gain market share, due to restrictions imposed by the United States. This additional pressure, he warned, could particularly affect Argentina if domestic competitiveness is not protected.

Therefore, he reiterated his emphasis on eliminating the vestiges of financial repression as part of a comprehensive policy that combines clear rules, predictability, and investment incentives. " Predictability is a key element for economic agents to plan and expand their activities ," he maintained.

Regarding inflation, the former minister analyzed the measurements released by his son, Alberto Cavallo , and acknowledged a slight increase in June. However, he urged caution against alarmism. In his view, the increase remains within the range that has been seen since November and, therefore, does not imply a drastic change in the trend.

Regarding the level of activity, he praised the recovery recorded in April through the EMAE, but warned that the initial data for May and June could indicate a renewed stagnation. The level of real interest rates, he explained, is acting as a clear brake on the recovery: "This should not be surprising, given the level of interest rates," he concluded.