MercoPress. South Atlantic News Agency

Unofficial US dollar crosses 200-peso threshold in Argentina

“The Central Bank has not lost reserves. In fact, it has accumulated them,” said Guzmán, whom the market seems to no longer trust

As next Sunday's mid-term elections loom over and the government of President Alberto Fernández seems headed for inevitable defeat, desperate Argentinians turned to the currency black market to convert their volatile pesos into US dollars, thus piercing the psychological AR $ 200 threshold for the first time.

Although US dollars are quoted at about half that rate at official banking institutions, there are caps of US $ 200 a month on natural persons and not even everybody is eligible for it. Hence, the “blue” dollar closed Wednesday at AR $ 205, it was reported.

The new figures represent an AR $ 5.50 increase compared to Tuesday's quotes, amid growing demand and speculation from a market that is anticipating havoc as of next Monday.

Despìte operators' foreseeing a sharp devaluation, Economy Minister Martín Guzmán has ratified the current gradual depreciation of the peso behind inflation will be maintained. Guzmán said he would stick to his policy of not sharply devaluing the official exchange rate.

The fact that the unofficial price has managed to cross the ceiling of AR $ 200 has been regarded as a red flag, regardless of the opinion of government agents, now the gap between the official and the unofficial rates stands at 104%, the widest since November 2020.

Argentina's representative to the International Monetary Fund (IMF) Sergio Chodos has acknowledged the exchange rate was one of the issues on which most of the work with the multilateral organization is focused.

The IMF is monitoring the situation the market describes as a “babushka of restrictions” from both the Central Bank and the Stock-exchange ruling body CNV. There are currently 17 hindrances to the people's access to foreign currency to try to stop the drain on reserves.

In addition, Guzmán's statements caused surprise in the market, who in front of an audience of businessmen said that “the Central Bank has not lost reserves. It has accumulated them.”