MercoPress. South Atlantic News Agency

Argentina: “Blue” dollar hits new all-time high

The BCRA sold reserves Tuesday after 35 straight days of purchases

The “blue” (a euphemism for “black market”) dollar rose AR$ 10 Tuesday and sold for AR$ 810, thus setting a new record, it was reported from Buenos Aires.

With this new climb, the gap between the parallel dollar and the official exchange rate stood at 130.5%, the highest since July 2022 when then-Economy Minister Martín Guzmán resigned. So far in 2023, the blue dollar has gone up AR$ 464 after closing 2022 at AR$ 346.

Meanwhile, the credit card dollar for transactions abroad -with a 30% PAIS tax and a 45% collection on account of the income tax- stood at AR$ 642.25. For purchases over US$300 -which have an additional 5% surcharge-, it stood at AR$ 660.6.

In this scenario, the Central Bank (BCRA) sold US$19 million worth of reserves in the Free and Single Exchange Market (Mercado Único y Libre de Cambios - MULC), thus cutting 35 consecutive days of positive results, the best streak in the last 26 months.

In September, the Central Bank added close to US$ 530 million to its reserves through purchases in the foreign exchange market, although in the past few days, its interventions were worth below US$ 5 million per day.

In a move to maintain the flow of dollars in a season of low agriculture exports, the administration of President Alberto Fernández Tuesday decreed the extension until October 25 of the Export Increase Program (PIE), better known as the “soybean dollar.”

Last week, the US dollar had reached a nominal intraday historical high of AR$ 805, which it reached again this Tuesday, given the real lack of foreign currency supply at a time of increasing hedging, less than three weeks before the general elections.

In August, the blue dollar jumped AR$ 185 or 33.6% -the most important monthly increase since April 2020 (+41.3%)- after the 20% devaluation of the peso after the Mandatory, Open, and Simultaneous Primary (PASO) elections.