The US dollar in Argentina reached a new record on Friday at the end of nerve racking week which saw the greenback in the parallel market climb another 40 cents and close at 11.90 and 11.95 Pesos purchase and sale prices. During the week the US dollar soared 1.15 Pesos, and closed the week with a gap of 75.6% between the official dollar exchange and the 'blue' dollar.
Tourists with planned vacations overseas, speculators who believe there is no cap so far for the greenback in Argentina, and total lack of confidence in the economic policies of the current devalued administration of President Cristina Fernandez are feeding into a frantic purchase or chase after the blue dollar.
Meantime the official dollar, sold at banks and money exchange houses, mainly used for foreign trade and limited tourist overseas activities closed at 6.755 and 6.805 Pesos, and some last minute sale from exporters helped the Central bank end Friday with a 30 million dollars net increase in international reserves.
The bank also tried to drain liquidity by selling bonds in the local market with relative success.
Meanwhile in neighboring Uruguay where many Argentines prefer to spend their holidays, the US dollar was selling at 12.50 Argentine Pesos.
Argentine cabinet chief Jorge Capitanich spoke about the run on the US dollar which is climbing day after day and insisted the positive side of the policies applied by the Kirchner couple, Nestor and Cristina, and their impact on the central bank international reserves.
”It was actually 'a virtuous policy' (accumulating reserves) since Argentina has been repaying debt, ('which this government did not contract or take new loans at usury cost'), the level of international reserves would be far much higher.
”We would then have 73bn dollars in reserves and not the current level (just below 30bn) said Capitanich who recalled that twenty years ago when the fixed exchange rate: one dollar equivalent to one US dollar, the level of reserves was 21.9bn, and during the last week of December 2013, they stood at an average of 36bn.
Nevertheless the cabinet chief reiterated that the Argentine financial system in Argentina is liquid and solvent”.