Miguel Kiguel, executive director of EconViews in Buenos Aires: “The government is facing two severe problems. The most urgent and most damaging is the lack of net international reserves, which are now in negative territory and in the absence of decisive measures they will continue to drop. The underlying problem is an overvalued currency, which the central bank has been unwilling to correct. The traditional solution would have been a devaluation, but this is not option for this administration, as it has been dogmatic on the issue. The remaining options would be tightening the foreign-exchange controls further, which would be lethal for economic activity, or splitting the foreign-exchange market by adding a second more depreciated exchange for most exports, imports and many other transactions. This would amount to a partial devaluation of the currency, but it would allow the government to keep the narrative. Lack of action would amount to a sharp deterioration in the external accounts and might lead to a default on foreign currency debt and out of control parallel exchange rates. The second problem is…”