The ‘parallel’ or ‘blue’ dollar in Argentina which last week soared day after day to reach on Friday a record 9.30 Pesos, on Monday edged down four cents to 9.26 Pesos while the official ‘dollar’ remained stable at 5.13 and 5.19 Pesos (buying and selling).
Limits imposed by the Argentine government on the free trading of hard currency have only triggered a greater demand as Argentines believe the Central bank is about to take drastic measures to try and control the markets since the gap between the official and ‘blue’ has climbed to almost 80%.
Economist in chief from the think-tank Fiel, Daniel Artana admitted that the gap “will continue to fluctuate but will remain high” and a long term tendency to have the two markets converging, one which is above 5 Pesos and the other below the 10 Pesos.
Any further controls will only delay the corrections and the more you restrict the higher the gap between the two markets, said Artana. He recalled that Deputy Economy minister Axel Kicillof has proposed to have a double exchange rate, but did not have enough support to implement it.
Another economist, Roberto Cachanosky warned that the skyrocketing of the parallel dollar “should not surprise because there is a lethal cocktail: the government is printing money and at the same time there is a lesser supply of goods, and people naturally take refuge in the dollar”.