BCRA changes tack, Brazil’s Renda Cidadã mess

The announcement by Argentina’s central bank (BCRA) of a new monetary policy strategy, in which it will allow a ‘managed float’ of the peso, reduces the risk of the real exchange rate becoming overvalued, and boosts the chances of reaching a new IMF agreement ahead of a visit from the Fund next week. It should also allay fears of a slide towards the unorthodox economic policy model run by ex-president Cristina Kirchner in 2011-15. Elsewhere, the Brazilian government’s new Renda Cidadã plan suggests there is still political pressure to raise public spending, and policymakers are becoming less committed to complying with the spending cap.