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Montevideo, January 23rd 2021 - 23:01 UTC

 

 

Argentines fear major devaluation of the Peso and dollar sets new record at 9.34

Saturday, April 27th 2013 - 04:25 UTC
Full article 120 comments
A recent survey of business people showed 33% expect a dollar of ten Pesos by the end of the year A recent survey of business people showed 33% expect a dollar of ten Pesos by the end of the year

The US dollar in the ‘blue’ or parallel market kept climbing in Argentina ending a week of consecutive records reaching on Friday 9.30 and 9.34 Pesos (buying and selling price) 14 cents more than on Thursday. Since the beginning of the year the US dollar has climbed 36.97% while the official rate stands at 5.18 Pesos, with an increase of only 5.3%.

Fears of a devaluation of the Argentine Peso has intensified the demand for foreign currencies in the parallel market and is also boosting the price of all financial assets, which are used as a protection in the event of such a measure.

This fear was reflected in a recent survey from the Business School of the Austral University among 180 businesspeople in which 50% of interviews said they expect the US dollar to hover between 9 and 10 Pesos for the rest of the year. However 33% believe that by then, the greenback in Argentina will be trading at over 10 Pesos.

The rush on the dollar and the flight from the Peso comes at a time when farmers have started to sell their crops which means the Central bank is accumulating dollars. This however has not impeded the gap between the ‘blue’ and the official market to jump to almost 80%.

“There are too many Pesos that people don’t want and there are not enough dollars which is the currency people want to hoard” said Aldo Pignatelli a former Argentine Central bank president.

“People are fearful and this leads to a strong demand for dollars and the supply is low, so the price in the parallel market naturally goes up”, added the banker.

The current situation could also be partly an undesired consequence of the multiple raids by AFIP (the Tax revenue office) in search of information leading to money laundering or non declared flight of assets.

The deployment of tens of inspectors supported by federal agents in the financial heart of Buenos Aires scared the supply of dollars and helped significantly to fuel the latest rise and record.
 

Categories: Economy, Politics, Argentina.

Top Comments

Disclaimer & comment rules
  • Be serious

    Argentina should do a Panama and simply adopt the US dollar as its currency. The Argentine peso is on a par with toilet tissue.

    Apr 27th, 2013 - 04:52 am 0
  • John III (Pope)

    @1
    ROFL. I don't believe “Be serious” is being serious. It has to be a joke. Anybody want to explain the history of that particular “solution”?

    Apr 27th, 2013 - 08:05 am 0
  • reality check

    Wow, most countries police forces have Drug Squads, they have Dollar Squads, you could not make this up!

    Apr 27th, 2013 - 08:09 am 0
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