MercoPress. South Atlantic News Agency

Argentine government wants to regulate the black market for US dollars

Argentina’s Trade Secretary Guillermo Moreno again arm twisting to control prices: this time the US dollar

Senator and former cabinet chief Aníbal Fernández said on Sunday that the Argentine government is planning, from the open of the black market on Monday, to put pressure on money exchange traders in order for the ‘blue’ dollar rate to not go over 5.10 Argentine Pesos.

The announcement which triggered strong controversy and with the exception of President Cristina Fernandez government officials, is blamed on the restrictions imposed for the purchase US dollars, apparently was reached following a meeting between the national Trade Secretary, Guillermo Moreno and various money changers, to whom he asked for their collaboration in order to keep down the price of the currency in underground selling points.

The senator made the statements Sunday morning when he spoke with a local radio station, confirming the rumours that were circulating since Friday that the price of the official dollar exchange rate will continue to operate as normal in banks and exchange houses, that is at 4.49 Pesos to the dollar.

Senator Fernandez has been the most outspoken defender of the President’s position of ‘clamping the US dollar” saying that Argentines will have to learn to think and trade in Pesos, but committed a serious blunder when he had to admit his savings were in US dollars, and “I do what I want with my money”.

Since last November the Argentine government established very strict controls for operations with the greenback in banks and money exchange houses which limited supply and saw the resurgence of the so called ‘black’ or ‘parallel’ market with the dollar soaring to over 6 Pesos.

“When people see there are restrictions to the free floatation and trade of dollars they immediately start thinking something is wrong” warned the governor of Cordoba, Manuel de la Sota.

“Argentines over the last fifty years have learnt that the only safe haven for their savings is in the US dollar. The problem is not the dollar, the problem is the Peso, is inflation” said economist Rogelio Frigerio.

The common citizens’ frustration with the Argentine government’s attempts to ‘de-dollarize’ the Argentine economy saw a return of the past when hundreds of neighbours in different points of Buenos Aires took to the streets to protest banging casserole tops and honk horns to express their anger.

Furious with soaring inflation and government currency controls that make it difficult to buy dollars, citizens began to spread word of the protests on social networks. Then, for nearly an hour, drivers honked horns and apartment dwellers banged pots as they leaned out of windows and balconies in support.

The protest appeared to have been limited to middle and upper class neighborhoods of Buenos Aires. But cacerolazos are highly symbolic in Argentina, where a decade ago pot-banging citizens angered by the collapsing economy marched in huge crowds and drove several presidents from office.

The latest protest drew much smaller crowds than in 2001 and 2002, but it had a similar message: “For an Argentina that all of us want, we say enough”.