The IMF is in Buenos Aires this week on its second technical mission to assist the development of a new inflation index. It is difficult to accurately assess the starting point for discussions, but the balance of evidence suggests that inflation is currently running at around 25% (well above the official measure of 10%) and that it is likely to reach 30% over the coming months. The peso has to fall further to maintain competitiveness – we think it will reach 4.50/$ over the next year (from 4.05/$ currently).