Wednesday was another day of intense trading for the money exchange market in Buenos Aires with the “blue” or black market dollar reaching a new record, 6.15 Argentine Pesos, which for the first time was higher than the system used for getting dollars out of the country.
The system called “cash with pay-off” consists of buying assets in Argentina in Pesos and have them turned into US dollars in New York for example with shares traded in the stock exchange or bonds. The trading price for the dollar under this system closed at 6.07 Pesos.
The strong demand for the blue dollar in the black market was boosted by the growing difficulties to purchase the greenback in the money exchange houses, hounded by officers from the Tax revenue office, AFIP, including specially trained dogs to sniff for dollars and Euros.
“This environment has triggered a psychological pressure among investors which has seen the blue dollar soar. It’s not normal and there is no market logic in the fact that it’s cheaper to buy dollars in New York than it Buenos Aires”, said money exchange agents in Buenos Aires.
Meanwhile the US dollar in the official market traded at 4.45 and 4.48 today, remaining virtually unchanged from the previous price at the close business yesterday. Likewise the Euro remained the same, trading at 5.66 and 5.80 Pesos at Buenos Aires exchange agencies.
This means that the gap between the official and parallel market for the US dollar climbed to 1.67 Pesos equivalent to 36%.
At the end of the day the Argentine central bank reported a net purchase of 10 million dollars. So far this month the US dollar has strengthened 21% against the Argentine peso in the black market.
As Argentines flee from the Peso to the US dollar or other assets, car sales in May are expected to mark a new record, 7% higher than a year ago and the Buenos Aires stock exchange contrary to the rest of the world is enjoying a bull market having climbed for the fourth day running: 2.2% over Wednesday
Meanwhile in Brazil the US dollar climbed to 2.10 Reais but ended trading Wednesday at 2.039 following aswaps intervention from the Central Bank.
This means that the US dollar in Brazil has strengthened 11.2% since the beginning of the year and 9.1% in May as a consequence of a change of policy from the government that now is emphasizing on boosting domestic demand and stimulating exports with a more competitive currency.
Contrary to Buenos Aires Merval the Brazilian stock exchange Bovespa was down 0.76% to 54.619 points. Bovespa so far this month has lost 11.65% which is the worst monthly performance since October 2008 in the midst of the world financial crisis and recession.