Thursday, January 31st 2013 - 07:55 UTC

Argentines love for US dollar remains unbeatable, even as it approaches 8 Pesos

Argentines wishing to spend vacations overseas, edgy farmers, strong demand from business and the government’s hoarding of hard currency are pushing the US dollar to new highs in Argentina, just a few cents away from the threshold 8 Pesos to the greenback, while in the official market trading is climbing closer to 5 Pesos.

Tight government supply, demand from vacationers and edgy farmers have seen the parallel dollar increase 16% so far this month

On Wednesday the ‘blue’ or parallel dollar ended trading at 7.92 Pesos, while the ‘official’ dollar of limited and cumbersome access ended operations at 4.98 Pesos.

According to local money exchange agents, at the end of the month there is a large turnover of vacationers, those returning from their January annual holiday and those preparing to leave to enjoy February which puts pressure on the parallel market since having access to the official dollar, once the paperwork is filled and approved not always renders the sum expected.

Big business is also after dollars to cover the shortage not available in the official market while farmers with prospects of an increasing dollar (a top government official anticipated a 6 Pesos dollar by the end of the year) are sitting back on their crops thus limiting the supply of fresh dollars.

At current prices and with January not entirely over the US dollar in the parallel market has increased 16.4%, and the gap with the official price has increased to almost 60%.

Under the system imposed over two years ago by the government of President Cristina Fernandez access to hard currency has become increasingly difficult plus the fact that holding US dollars even in banks is openly discouraged by authorities. Central Bank argues it needs all the dollars possible to honour sovereign debt and to pay for imports, which also means Argentines should not save in dollars despite the long established tradition given the country’s monetary instability and inflation track record.

President Cristina Fernandez reprimanded a minister and top officials for keeping their savings in dollars and she has publicly stated that her savings and bank deposits (several millions) are no longer in the US currency.

Likewise Argentina’s grains exporters’ chamber, CIARA, revealed that average sales of US dollars in January a year ago averaged 74 million dollars, but in 2013, the sum is 61 million dollars. February contracts for grains and oilseeds in the local futures market estimate the US dollar in the official market at 5.04 Pesos and 5.10 in March.

Additionally bank interests on deposits in Argentine Pesos have remained quite stable and are not attractive since they do not cover the non-official inflation estimated at 22% to 25% and spurred by a monetary base expanding at an annualized 40%.

47 comments Feed

Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.

1 The Chilean perspective (#) Jan 31st, 2013 - 09:11 am Report abuse
It should hit 10 pesos very soon.
2 LEPRecon (#) Jan 31st, 2013 - 09:16 am Report abuse
Of course they love US dollars, the Peso isn't worth the paper it's printed on, and they know it.

They also know that there is going to be a huge devaluation soon, and want to get some hard currency that will allow them to weather the approaching storm.

The government of Argentina obviously believe that the people of Argentina are really stupid, but the people of Argentina have been through this same thing approximately every 10 years.

The only difference this time is that the government is forcing them to buy the blue dollars, but buy them they keep doing.

It won't be long now. I wonder if CFK will make it to the waiting helicoptor before the angry mob arrives? She'd better have paid the pilot up front and in US dollars too. ;)
3 ChrisR (#) Jan 31st, 2013 - 10:08 am Report abuse
Well, this was a surprise, NOT.

Only fools and Uruguay take the AR arsewipes as payment and the population want them even less.

And TMBOA has all her millions in pesos, yeah, right, OK, we believe you.

4 Idlehands (#) Jan 31st, 2013 - 10:42 am Report abuse
Notice she only said her savings were no longer is $US

She didn't say they were in Argentine pesos.
5 JuanGabriel (#) Jan 31st, 2013 - 12:08 pm Report abuse
@4 haha yeah would be hilarious if someone happened to discover they were in Sterling.

Although more likely Swiss Francs
6 Tobers (#) Jan 31st, 2013 - 12:13 pm Report abuse

Didnt she say she and her gang -pesafied- their dollars? Not that I believe it.
7 ElaineB (#) Jan 31st, 2013 - 12:43 pm Report abuse
I dont think she mentioned the stash she has abroad. The missing millions her late husband stole.
8 GFace (#) Jan 31st, 2013 - 01:15 pm Report abuse
Story aside, that's the strangest newspaper headline since “Dog bites man.” If it were and advert it would say, “why have one USD when you can have ~8~ ARS for the same low price!”
9 CaptainSilver (#) Jan 31st, 2013 - 01:49 pm Report abuse
Pieces of eight! Soon be pieces of 10! Or, 16 pesos for a Falklands pound.....
10 andy65 (#) Jan 31st, 2013 - 02:29 pm Report abuse
@Idlehands, Knowing how Kirchner loves all things British (Luxury aircraft) Theres a good bet her savings are in GREAT BRITISH POUNDS
11 jakesnake (#) Jan 31st, 2013 - 04:12 pm Report abuse
It appears the problems in Argentina are having some impact on the summer economy on the beaches in Chile as well, e.g., Renaca, Viña, etc. TVN had a report last night that they're spending fewer nights, spending less money, etc.
12 briton (#) Jan 31st, 2013 - 07:43 pm Report abuse
no trolls yet lol.
13 Ayayay (#) Jan 31st, 2013 - 08:09 pm Report abuse
@4 exactly. And that deputy ECONOMY minister saves in dollars.
14 ElaineB (#) Jan 31st, 2013 - 08:50 pm Report abuse
@11 That is interesting. I was speaking to a friend in Chile a couple of days ago and he said the tour operators were complain that January had been a terrible month for them. I wondered at the time if it was because of the lack of Argentine trade, Chileans seem to holiday more in February.
15 Optimus_Princeps (#) Jan 31st, 2013 - 08:59 pm Report abuse
@12 What do you mean? All Argentinians everywhere in the entire world (especially Canada) agree with Cristina 100% forever you insidious disingenuous perfidious surreptitious voracious carnivorous plundering imperialistic pirate vulture!

We will soon have all the nukes in the entire world made 100% in Argentina and it will convince certain paranoid asinine schizophrenic ignoramuses to join others in abominable repugnant shanties. Then we will shower OUR Malvinas with stones inexorably heaved from half sunken rusty vessels! Jajajaja!
16 Nostrolldamus the 8th (#) Jan 31st, 2013 - 09:29 pm Report abuse

I had to go get water because the service was disrupted since early this morning, don't worry I'm back you idiot.
17 yankeeboy (#) Jan 31st, 2013 - 09:37 pm Report abuse
Toby, Do you learn to carry the ater on your head at a young age like all the other 3rd worlders?
Better get used to it.
it is only going to get worse next year.
You'll be lucky to have any heat this winter.
18 Nostrolldamus the 8th (#) Jan 31st, 2013 - 09:41 pm Report abuse

Unlike you, I don't deny if I suffer some problem, no place is perfect.

So another school shooting today, and a shooting in a courthouse. It used to be one mass shooting per day (like the 70 year old fart yesterday)... is it now gonna be two mass shootings a day??
19 yankeeboy (#) Jan 31st, 2013 - 09:53 pm Report abuse
By mass do you mean 1 person was shot adn 5000 miles apart another was shot in a parking lot? Good gracious you are gullible, hmm stupid or gullible hmm not sure.

You didn't answer my question, did your mom teach you to carry the water on your head? I see if all the times in the National Geographic pictures. Funny everyone I know in Argentina would have sent the maid or gardener to get water. You must be dirt dirt poor.
20 Nostrolldamus the 8th (#) Jan 31st, 2013 - 09:57 pm Report abuse
The funniest shit is that you really are serious about people answering your 2 year old questions based on fantasies. hahaha gosh you must be bored today. brrr.
21 briton (#) Jan 31st, 2013 - 10:08 pm Report abuse
oh dear, some argies are upset,

trolls you were,
trolls you are,
trolls you willever be,
carry on insulting, trolls .lol.
22 yankeeboy (#) Jan 31st, 2013 - 10:10 pm Report abuse
I haven't been on here for 2 years and I don't know what you are talking about.
No I am not board, I can multitask really well.
It is cold here though you're right
I almost went to Florida this weekend but something came up,
Maybe next week though.
But my heat is on and so are my lights! Gasp! And in the 6 years I have lived here I have not lost electricity 1x even in hurricanes.
Wow! Crazy huh?
23 Nostrolldamus the 8th (#) Jan 31st, 2013 - 10:23 pm Report abuse

Just because you live in the horse stalls of your masters estancia/ranch w/e, with its personal supply of power, doesn't mean the average american does.

Or you already forgot gas stations in your most important city had no power ONE month after a relatively harmless hurricane. hahaha
24 Ayayay (#) Jan 31st, 2013 - 10:27 pm Report abuse
The homicide rate in my state's metropolis continues to be 300% less than Argentina's LAST REPORTED STATISTICS in 2004.
Quality of life is radically different in different olaces of the U.S, just like Honduras & Argentina.
25 Nostrolldamus the 8th (#) Jan 31st, 2013 - 10:31 pm Report abuse
So no its 2004? Last night it was 2008, before it was 2010.

I guess by next month the date of last statistics in Argentina will be pushed back to 1976.

how predictable
26 yankeeboy (#) Jan 31st, 2013 - 10:49 pm Report abuse
yeah but you don't have water after a little rain. Water for gosh sakes relatively large metro area with no drinkable water.

and it will only get worse
worse and worse
Good thing today was a holiday because 8/1 was assured. Maybe the little breather will help you afford toilet paper in Nov.
Maybe not though
27 Nostrolldamus the 8th (#) Jan 31st, 2013 - 11:02 pm Report abuse

No you nincompoop, see... when there is a very heavy storm anywhere, sometimes the drains clog, and there is overtopping of run-off water into the tanks where the potable water is. When this occurs, either the pumps shut down or a boil warning is issued.

It happens all over the world, all the time during bad weather, and you usually learn that in a 5th grade field trip. Either you had dropped out of school by then, your school was a typical American public school (awful), or the day of the field trip there was a mass shooting so class was canceled.

All three have equal chances of being the case in your great USA. :{
28 yankeeboy (#) Jan 31st, 2013 - 11:10 pm Report abuse
I have never been without water or under a boil alert ever in my life in the USA.
It is not common it would have to be an extreme weather condition
not a little rain
Only in poor countries...
and it will only get worse
I wonder what will happen when WB shuts of all the funds your gov't uses to upgrade the water and sewer systems?
I guess we will find out tomorrow
29 Nostrolldamus the 8th (#) Jan 31st, 2013 - 11:15 pm Report abuse

Too bad all those millions had to suffer through no gasoline and water for weeks after that storm, I guess they are not as lucky to have a master as gracious as yours, all them plebs got to live outside the ranch.

Mendoza is in a desert region, thus the soil does not absorb much water. A severe storm's water has nowhere to go, but what would you know about living in an arid region where you have to WORK for every little piece of green grass, let alone a tree.
30 yankeeboy (#) Jan 31st, 2013 - 11:25 pm Report abuse
I find it hilarious that in your tiny mind a 100 year weather event has the same equivalence as a small rain storm.
I guess that's from years of being brainwashed your whole file and feeling inferior to me.

BTW you can't drop out of school in 5th grade here your parents would go to jail. I guess you can in your country, one of my maids only went through 6th grade. She couldn't even write. It was sad.
31 Nostrolldamus the 8th (#) Jan 31st, 2013 - 11:33 pm Report abuse
Well, you retard, the heat wave in Argentina is the worst in 50 years... and you bitching about “oh, it's just your run of the mill summer”. You are a retard because you trully are incapable of seeing the hypocrisy.

So, which state of the USA will be the location of tomorrows mass school shooting? I'd say Florida or California is overdue.
32 yankeeboy (#) Jan 31st, 2013 - 11:44 pm Report abuse
Wait, so what is causing you to have poisonous water, the heat or the rain?

You do get muddled up quickly don't you?

By mass do you mean 1?

I can't predict many things but I know
by December
the peso will be lower and
everything will cost at least 30% more in your country

Unless you are working in a locutorio (good gracious it is hard to imagine they still exist in poor countries) I predict pretty soon you'll run out of $ to pay to be on the internet for so long everyday.

There have been lots of market news of the RG crops drying up. Good for the USA but oh so bad for Argentina.
33 Nostrolldamus the 8th (#) Jan 31st, 2013 - 11:57 pm Report abuse
Good news for the USA? hahahahahaha.... half of your farmland was torched last year and it still has not gotten ANY rain. And there's only one/two months before its starts getting hot again... better pray for rain.
34 yankeeboy (#) Feb 01st, 2013 - 12:26 am Report abuse
It's winter goofball there is plenty of time for rain and even if it's dry again we still produce more than anyone else.
But you only have another week or so to go
and there isn't any forecast
but it is supposed to be hot hot hot
Have they got the lights back on in BA yet? Large swaths of BA and the suburbs are still out from yesterday. I heard there was some more pot banging.

BTW was it the heat or rain that poisoned yoru water? Still undecided?
Hard to choose huh?
35 BenC30 (#) Feb 01st, 2013 - 12:58 am Report abuse
Argentina should be careful. They will end up like Zimbabwe having only £138 left in the bank!
36 Nostrolldamus the 8th (#) Feb 01st, 2013 - 12:59 am Report abuse
+138 is better than -

Right UK???
37 Great Britain (#) Feb 01st, 2013 - 02:19 am Report abuse
I'm actually feeling sorry for Nostro - he is patriotic and defends his country far beyond what he knows academically to be reasonable - he is, I am quite sure, a good/nice person and it is a shame that nationalism (on our side too) prevents us from doing more than insulting each other - if any of us truly feel well-represented by our leaders I'd be surprised - I do think CFK is exceptionally bad (for Argentina) but I am quite sure her days are numbered.
38 mastershakejb (#) Feb 01st, 2013 - 06:05 am Report abuse
39 toooldtodieyoung (#) Feb 01st, 2013 - 07:24 am Report abuse
36 Tito The Clown Troll

So what do you think about The missing millions KFC's late husband stole?

So what do you think about have an inflation of around 25%?

So how do you feel about peso / dollar exchange rate at the moment?

and how do you feel about the rolling power outages??

Take your time Tito, I know these questions are difficult for you, so just take your time............ we are not going anywhere.
40 agent999 (#) Feb 01st, 2013 - 08:58 am Report abuse
Its not getting any better
41 ChrisR (#) Feb 01st, 2013 - 10:56 am Report abuse
32 yankeeboy

30%, that's very generously low of you.

I am going for 40% by the end of December 2013. I think it's going to be an exceptional year for argie stupity at all levels but especially TMBOA.
42 yankeeboy (#) Feb 01st, 2013 - 11:46 am Report abuse
Chris, I said AT LEAST 30% and that is based mainly on the expected Peso depreciation.
Now that the unions want negotiations 2x year and probably at 25% each time, it could spiral a bit faster than we can conservatively predict right now.
If the 60% differential between the real and gov't exchange rate isn't alleviated somehow very shortly CFK will have no alternative but to MASSIVELY DEVALUE the peso in one shot. If she does devalue it must be somewhere above 8 and I'm thinking to give the economy a little jolt it could be $14-16/1. 10/1 won't do anything but fuel more black market trades. Moving it to 14-16 could get her through the next election but good gracious the inflation will be at least 100%.
There is no good solution to this mess
It is very very hard to come out of Stagflation
especially when you have avowed Marxists running the country

Fun to watch tho huh?
43 commonsparrow (#) Feb 01st, 2013 - 08:21 pm Report abuse
It all comes down to this:
Lets say you were given a gift of one million dollars, and the terms of the gift were that you had to invest it all in ONE country, any country in the world, but NOT your own. Which country would it be?
44 reality check (#) Feb 02nd, 2013 - 02:49 am Report abuse
Zimbabwe, never been good with money!

45 ChrisR (#) Feb 02nd, 2013 - 03:53 pm Report abuse
42 yankeeboy

We both know there is a massive train-wreck just around the corner for the argies.

Don't know it is fun to watch given the people who will really be caught by this are the likes of Simon68 and his family.

If it WERE only the Malvanistas, then yes, bring it on.
46 yankeeboy (#) Feb 02nd, 2013 - 06:19 pm Report abuse
Maybe fun was the wrong word maybe, academically interesting, historic, hmm not sure?
I was reading about Stagflation the other day. There are 3 ways to come into it, the only know times a country has had stagflation one of 3 events happened and basically the gov't lost control of the economy.

In Argentina they have induced the 3 events simultaneously!

1. productive capacity of an economy is reduced by an unfavorable supply shock
2. central banks can cause inflation by permitting excessive growth of the money supply,[8] and the government can cause stagnation by excessive regulation of goods markets and labour markets.[9
3.central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway price/wage spiral.
There is no cure.
The system basically has to go back to zeor/negative to right itself.
My guess is it will take a generation to fix.
47 ChrisR (#) Feb 03rd, 2013 - 05:40 pm Report abuse
46 yankeeboy
“My guess is it will take a generation to fix.”

I agree but perhaps even longer if the next President is a stupid and corrupt as TMBOA.

I don't think even the argies are mad enough to have Maximo-coke-head as the president, but you never can tell.

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!


Get Email News Reports!

Get our news right on your inbox.
Subscribe Now!