MercoPress. South Atlantic News Agency

Argentina: “Blue” dollar closes in on AR$ 600 threshold

Cash from the IMFis hoped to bring on some tranquility after the PASO elections

The “blue” (a euphemism for “black market”) dollar rose sharply on Monday and closed at AR$ 596, thus reaching a new all-time high ahead of next Sunday's Simultaneous, Mandatory, and Open Primary (PASO) elections, it was reported in Buenos Aires. The gap with the official quotation stood at 110.8%.

According to financial sources quoted by local media, government controls on informal operations have led to a reduction in transactions with the consequent increase in the price.

Meanwhile, the credit card dollar for operations abroad with a 30% PAÍS tax rate and a 45% income tax collection stood at AR$ 516.69, while for purchases over US$ 300, which have an additional 25% tax, it was quoted at AR$ 590.50.

In this scenario, the Central Bank (BCRA) bought Monday US$ 21 million for a total of US$ 380 million this month in the single and free foreign exchange market (MULC), in a day in which the agricultural dollar contributed settlements for US$ 132 million through the differential exchange rate of AR$ 340 for exports in force until Aug. 31.

The blue dollar is now expected to pierce the AR$ 600 shortly, which did happen Monday in some provinces. As speculations mount on how high it might reach, traders insisted the current situation was to be expected leading up to the elections. But with July's inflation 7.3%) higher than that of June (7.1%), the outlook is not encouraging.

Further controls and raids on black market exchange parlors are to be expected, according to local analysts. However, a cash inflow from the International Monetary Fund (IMF) due to arrive shortly is hoped to bring on some tranquility after the PASO elections, it was explained.