Thursday, May 9th 2013 - 04:56 UTC

Argentina: Dollar kept climbing on Wednesday and reached 10.45 Pesos

Despite the tax amnesty bill and investment options pledged by the government of President Cristina Fernandez, the dollar kept climbing in Argentina. After breaking the key psychological barrier of 10 Pesos to the dollar on Tuesday, the “blue” dollar which trades on the parallel market climbed again on Wednesday another 37 cents to reach 10.45 Argentine Pesos.

Argentines distrust their currency but love ‘Uncle Sam’

The blue dollar jumped past the key psychological barrier of 10 Pesos on Tuesday in thin trade, reflecting persistent demand for greenbacks amid tough currency controls.

Meanwhile, the official rate remained unchanged at exchange offices in Buenos Aires at Pesos 5.16 (buying price) and Pesos 5.22 (selling price), with the gap between the two markets over 100%.

In a context of high inflation, negative interest rates or other options to defend the value of the Argentine currency, Argentines are increasingly taking refuge in the US dollar. To this must be added an overall feeling of distrust and uncertainty which can have a greater impact that what stats can present.

For foreign investors having to exchange dollars at the official rate of 5.20 Pesos while costs are ruled or influenced by the ‘blue’ dollar which now doubles the price is no attraction. Likewise importers want to speed their overseas purchases and exporters to delay their sales, all of which makes the greenback even scarcer.

On Monday Argentine president Cristina Fernandez ratified the current monetary policy by warning that “those who are pretending to make money with devaluations, will have to wait for another government”.

The market reaction was to see the price of the blue dollar jump 2.13% and break the 10 Pesos psychological barrier. The ‘blue’ dollar has soared 54% since the beginning of the year and the official rate, 6.5%.
 

14 comments Feed

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1 lsolde (#) May 09th, 2013 - 08:32 am Report abuse
l have admit that l'm quite partial to Uncle Sam's currency also.
2 malicious bloke (#) May 09th, 2013 - 09:54 am Report abuse
Well this is certainly accelerating. Someone should do something!

*grabs popcorn*
3 Conqueror (#) May 09th, 2013 - 10:40 am Report abuse
@2 How very inconsiderate of you. “*grabs popcorn*” You know argies can't afford such extravagances.
4 ElaineB (#) May 09th, 2013 - 11:16 am Report abuse
Moreno is meeting with bank officials...

“Moreno demanded “blue” dollar to be traded between AR$ 6 and AR$ 6.50 in the upcoming days. Both values are far from the current AR$ 10.

“The so called “blue” dollar can’t be so high, it has to go down immediately,” said the Government authority. Moreno mentioned consequences in case his demand wouldn’t be fulfilled. “If you don’t drop it in the upcoming days, we will enforce control in the city of Buenos Aires,” warned Moreno.”

Really? What is he going to do to ENFORCE CONTROL?
5 yankeeboy (#) May 09th, 2013 - 11:23 am Report abuse
Elaine, They know who the traders are, my bet is they'll ( or their family) will start to have terrible terrible “accidents”.

Not saying this will stop the trade but they need to scare people and try to slow it down

The Ks are thugs of the first order, violent stupid thugs, they don't know any other methods.
6 ElaineB (#) May 09th, 2013 - 11:35 am Report abuse
Yeah I heard about the death threats in the Baez case.

Desperate people do desperate things.
7 Pirate Love (#) May 09th, 2013 - 02:30 pm Report abuse
whats the odds on $11................................
8 Optimus_Princeps (#) May 09th, 2013 - 03:34 pm Report abuse
@6 It's going to get ugly. The K's are capable of burning Argentina to the ground to keep their ill-acquired gains. I'm getting out of here, because staying is nothing short of an act of masochism.
9 yankeeboy (#) May 09th, 2013 - 04:35 pm Report abuse
They're saying even with the SOY sales BCRA reserves are going down between U$700-900MM this month.

Catastrophic
Unsustainable
10 JamesS (#) May 09th, 2013 - 05:31 pm Report abuse
It's seems Moreno's bullying tactics is sort of working as the blue dollar dropped below AR$10...
11 commonsparrow (#) May 09th, 2013 - 06:07 pm Report abuse
It dropped a little, but graphing it shows consistent climb, hard to beleive its downhill from here. I like watching it here: @dolarblue (twitter).
12 MrFlagpole (#) May 09th, 2013 - 07:10 pm Report abuse
Shit me.

I think if all my money was in pesos I'd want my President gone.
13 JamesS (#) May 09th, 2013 - 07:48 pm Report abuse
my money Its in pesos “man's got to eat right” How do you suggest we get rid of her, when she's got this support from ultrakirchners, and bascially controls media/banks/judges ect ect ?? I would really like to know ! I'm all for it, but unless the shit hits the fan before the mid elections, I can't see anything but a victory for the kirchnerismo with the power they have.
14 yankeeboy (#) May 09th, 2013 - 08:33 pm Report abuse
They can stop if for a little bit when they send out the AFIP goons to patrol and pester.
They'll just move to another street.

“american change money”
“american change money”

The telling part is that even threats of bodily injury and bankruptcy they still couldn't get it under 10

The peso has only one way to go long term
down down down

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