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Economy The 3 reasons that pushed the MEP dollar below $1,200 for the first time in four months - Infobae

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The 3 reasons that pushed the MEP dollar below $1,200 for the first time in four months - Infobae​




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Source:



September 19, 2024



The financial exchange rate is trading this Thursday at $1,198, a nominal floor since May 30, while the “contado con liqui” is trading at 1,223 pesps. The drop is also noticeable for the free exchange rate, which is down 20 pesos or 1.6%, to 1,240 pesos.


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With greater supply, alternative dollar quotes are deepening their declines.

The dollar's exchange rate fell again this Thursday, due to three factors that converge in this trend.

These are:

  • Entry of foreign currency into the system through money laundering .
  • Official intervention with sale of dollars in the stock market.
  • Greater supply of foreign currency to obtain pesos for the advance payment of Personal Property .

Thus, the MEP dollar is traded this Thursday at 1,198 pesos (-0.9%), a nominal floor since May 30, while the "cash with liquidity" dollar is traded at $1,223 through shares.

The decline is also palpable in the informal market, where the free-trade dollar dropped 20 pesos or 1.6% on the day, to $1,240 for sale, in the third consecutive round of decline. In September it fell 65 pesos or 5%. The exchange gap with the official exchange rate, at $964.50, is 28.6 percent.

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In this way, the "blue" dollar has been falling for the third consecutive day, while financial parities have been falling for six consecutive days.

The money laundering factor is key in this framework to guarantee a significant volume of foreign currency in banks. Private deposits in foreign currency accounted for USD 21,946 million in cash on Monday, September 16 (+381 million or 1.8% compared to Friday, September 13), a maximum stock since September 18, 2019 (USD 22,207 million), according to data from the BCRA. Since Javier Milei took office, these placements have increased by USD 7,820 million or 55.4% from USD 14,126 million on Thursday, December 7, 2023.


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“Regarding the impact that this could have on the price of financial dollars, we believe that the $1,200 level represents a solid floor. However, this could be surpassed if many people join the special regime of the Personal Property Tax, dollar deposits continue to increase and the Central Bank continues to sterilize the pesos generated by the purchase of reserves. However, as these factors lose strength, dollars could return to values between $1,250 and $1,300, aligning more with the dollar of monetary liabilities,” said Ignacio Morales , CIO ( Chief Investment Officer ) of Wise Capital.

"Although the daily balance and the reserves of the BCRA continue to be closely monitored, the flows mainly from money laundering -with dollar deposits growing very steadily- and from tax payments continue to lead, and so financial dollars are on their way to breaking through the 1,200 pesos mark, with chances of testing a 'gap' of close to 20%," said Gustavo Ber , an economist at Estudio Ber.

Amílcar Collante , an economist at Cesur (Center for Economic Studies of the South), stressed the impact of the “gradual lifting of the restrictions” after a relaxation of foreign trade restrictions by reducing “import quotas from four to two,” while “in September the PAIS Tax was lowered from 17.5% to 7.5%” and the total elimination of the PAIS Tax is planned for December.


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“As for the contribution of foreign currency that the agro-export sector can generate in 2025, although there is still a long way to go and it will depend not only on prices but also on harvests - it will be very important that the weather is favorable - a first working scenario estimates exports for USD 31.6 billion, almost USD 500 million below the exports that would be achieved this year (-1.5%). If the previous number is adjusted for the lower spending on soybean purchases from neighboring countries, a common practice of the Argentine oil industry in recent years, the fall in foreign currency is reversed, leaving the net flow practically neutral, at the same level as that estimated for this year (around USD 29.4 billion)”, specified a report from the Ieral of the Fundación Mediterránea.
 
oh how @Vince is always wise 😛 look at how the MEP Dollar is actually above the Blue right now!

MEP 1,221 https://www.ambito.com/contenidos/dolar-mep.html
DolarBlue 1,195-1,215 https://www.ambito.com/contenidos/dolar-informal.html

so, when i use my Santander Dolar MEP option this week, i ended up receiving 1,220 Pesos/Dollar, direct with no fees from my USD balance to my Pesos balance. i've still never used a cueva or arbolito, but presumably this means if i took a $100 USD bill downtown and got pesos, i'd only receive 1,195 right? that would be 25 Pesos per dollar LESS, and without the hassle and risk and commission. interesting

and the MEP has been rising a lot, and i noticed prices have followed rising perfectly (my haircut was 7,000 pesos now, beer liters went up 100 pesos each, etc.)
 
oh how @Vince is always wise 😛 look at how the MEP Dollar is actually above the Blue right now!

MEP 1,221 https://www.ambito.com/contenidos/dolar-mep.html
DolarBlue 1,195-1,215 https://www.ambito.com/contenidos/dolar-informal.html

so, when i use my Santander Dolar MEP option this week, i ended up receiving 1,220 Pesos/Dollar, direct with no fees from my USD balance to my Pesos balance. i've still never used a cueva or arbolito, but presumably this means if i took a $100 USD bill downtown and got pesos, i'd only receive 1,195 right? that would be 25 Pesos per dollar LESS, and without the hassle and risk and commission. interesting

and the MEP has been rising a lot, and i noticed prices have followed rising perfectly (my haircut was 7,000 pesos now, beer liters went up 100 pesos each, etc.)
How much were your haircuts before? I exchanged dollars yesterday and got 1,210 in Palermo so 1,220 is great rate. Of course things could jump around here up or down depending on what happens with IMF news.

Are prices jumping up at restaurants in Mendoza much? Here it is terrible in BA.
 
oh how @Vince is always wise 😛 look at how the MEP Dollar is actually above the Blue right now!

MEP 1,221 https://www.ambito.com/contenidos/dolar-mep.html
DolarBlue 1,195-1,215 https://www.ambito.com/contenidos/dolar-informal.html

so, when i use my Santander Dolar MEP option this week, i ended up receiving 1,220 Pesos/Dollar, direct with no fees from my USD balance to my Pesos balance. i've still never used a cueva or arbolito, but presumably this means if i took a $100 USD bill downtown and got pesos, i'd only receive 1,195 right? that would be 25 Pesos per dollar LESS, and without the hassle and risk and commission. interesting

and the MEP has been rising a lot, and i noticed prices have followed rising perfectly (my haircut was 7,000 pesos now, beer liters went up 100 pesos each, etc.)
Yes the MEP is actually the same or a bit ahead. I haven't used my US credit card in a while. Are you still using your US based credit card @StatusNomadicus? What are rates like?
 
How much were your haircuts before?
oops, good call, they were 6,000 Pesos beforehand, so about 17% increase. milk liters are still 1,290, beef is still 4,000-8,000 for the cuts i buy, but veggies right now in Mendoza at the fruit stands are wayyyyy cheap; 2kg of tomatoes for 1,000 Pesos, 2 big Honeydew for 2,000 Pesos, 10 corn husks for 1,000 Pesos, red/green bell peppers for 1,500 Pesos/kg, etc. (my deep freezer is full!)

restaurants
yes, increases in restaurants, but i got to Mendoza in the exact middle of Winter, so a Lomito and fries for 2 people was 16,000 Pesos at a restaurant i really like here, and now it is 25,000 so 56% higher, but EVERYTHING on the touristy street here has gone up since Christmas. i suspect Mendoza is much more tourist-heavy in Jan/Feb/Mar especially for all the holiday stuff and the Vendimia harvest tradition. i will report back April through December 🙂 i just avoid eating out on the tourist street Aristides, since it is so packed and expensive right now. buying flour, meat, rice, noodles, eggs, etc. are still very affordable, so i've been cooking and going to restaurants i haven't been to before, when i know the menu prices are less than $8 USD per person

1,210 in Palermo
crazy! Santander right now shows (Monday morning 10Mar2025) MEP of 1,209.59 to sell Dollars on the app (my main go-to now when i need Pesos). so basically it's the same as the rate you just got, and i don't have the risk of holding physical $100 USD bills, don't have to walk, and i can track the history of the rates on the app. my ARS/USD app shows the Blue Dollar is currently 1,215, for comparison. i did a sale at 1,231 ARS/USD last week, so i'll wait until it goes up again to get some Pesos. but mostly, it's interesting that some prices are going up in Pesos the past 3 months, because when i started selling Dollars with Santander, the first week of January 2025 i got 1,147 and now the rate is above 1,200 for the current MEP, which to me makes sense that this +5% increase in MEP rates tracks with the increase in Peso prices (but most things for me are the same cost in Dollars).

one big increase is the removal of subsidies in Mendoza. my gas bill is less than $5 USD monthly since i'm not using much now, but my Electricity bill with using a mini-split daily for the past 2 months has caused my Luz to go from 15,000 Pesos to 130,000 Pesos per month (some people were paying $10 USD/month for electricity last year! now $108 USD/month tracks more closely to a family using a decent amount of electricity monthly (415 kWh). i think local Nuclear power will fix this in the next decades, but who knows if Argentina has the will to de-regulate the industry. maybe a good hedge would be to buy a solar panel and run my primary bedroom Split A/C only on solar? (not needed at night if you pre-cool the room while the sun is up, perhaps). i suspect using gas as heat soon instead of needing A/C will get my bill very low again, sub-50-dollars per month is my goal for a 160-sqmt house.

Are you still using your US based credit card @StatusNomadicus
my lady has been using a new card to get some airline miles, only on Monday for Cencosud and Thursday for Carrefour paying with MercadoPago for a 15% discount, so i haven't been tracking it very well, and i'm waiting for her to fly back to the USA later this month, so i can catch-up on my twitter x.com/ArgentinaMEP posts that are VERY behind. but i have never seen it go too far from 7% less Pesos received than the official posted MEP rate, so at the current 1,222 ARS/USD https://www.ambito.com/contenidos/dolar-mep.html i would expect the real-world rate to be 1,142 MEP real-world ARS/Dollar.

1162 to $1 dollar today. Today with Western Union I got 1,222.20 to $`1 which I thought was great since it's over blue rate. Yesterday I got 1210 in Soho.
perfect, so MasterCard is tracking pretty well at 1,162 if my rough outdated math was 1,142. for me, unless i really need a credit card spend for a bonus, i try to only use my US cards with the 7% lower MEP rate when i can use it for the above-mentioned MercadoPago 15% discount, which allows you to use any payment method in the MercadoPago app (even though the Promos say "dinero en cuenta" only. i have tried this at Vea/Cencosud and Carrefour Express/Market/Hipermercado and as long as the cashier or self-checkout presses "Mercado Pago" as payment, the 15% is applied to the total cost. then you are getting 15% off, minus 7% on the MEP rate, so it's still a win and you can get your spending goals done, 2 days a week right now.

but 80% of my spending is converting Dollars to Pesos weekly on Santander's app, then withdrawing some cash for the once-a-week cash discounts i need (eggs, fruit stands, etc.), but my main spending is using the MODO app to get 40% off on butchers and veggie stores on the weekend, 35% for many businesses, and many other discounts like 25% at Carrefour on Fridays using the MODO app and an argentine Visa debit card as payment method. i am getting crazy cheap food and items compared to before i had access to MODO (needs my lady's DNI to use MercadoPago and MODO and have a US Dollar account in Argentina).

let me know if you guys want any other price comparisons in Mendoza. here's some to-go deals for @earlyretirement at a nice cafe/restaurant in a central location here in Mendoza:

menu2.jpg

menu1.jpg

2,100 Pesos for a coffee and tortita (USD $1.84)
7,200 Pesos for pasta with bread and cheese (USD $6.32)

this is from a nice cafe, and not the cheapest food around. but i could pay cash and get 10% somewhere similar, or MODO app and get 15+% off depending on the weekly limit (sometimes 6k Pesos, sometimes 20k Pesos a week, sometimes 30k Pesos/month, currently the 40% weekend discount is 8k/week savings).


and i didn't realize the grape harvest season here was so fascinating. if you want to check out what it looks like, i was listening to some intense poetry and very Pagan-feeling dances/theater a couple nights ago:



poetry and nature-worship, talking about animism and the living souls of seeds, grapes, wine, etc. - i had no idea it was so old-school! i feel like if you went back in time and were a part of the Eleusinian Mysteries in ancient/classical Greece it would have been very similar. the poetry was so rich that i had to listen a couple times and look-up words (like sowing seeds in a field). hope you like! just watch 1 or 2 of the poems/dances., since the whole thing is long and much of it is a Miss Argentina contest
 
yes, increases in restaurants, but i got to Mendoza in the exact middle of Winter, so a Lomito and fries for 2 people was 16,000 Pesos at a restaurant i really like here, and now it is 25,000 so 56% higher, but EVERYTHING on the touristy street here has gone up since Christmas. i suspect Mendoza is much more tourist-heavy in Jan/Feb/Mar especially for all the holiday stuff and the Vendimia harvest tradition. i will report back April through December 🙂 i just avoid eating out on the tourist street Aristides, since it is so packed and expensive right now. buying flour, meat, rice, noodles, eggs, etc. are still very affordable, so i've been cooking and going to restaurants i haven't been to before, when i know the menu prices are less than $8 USD per person
Thanks for the intel. How much has it gone up percentage-wise on the touristy streets? You mentioned 56% higher at the other restaurant but what are higher end restaurants at? In Buenos Aires they have gone up drastically.
one big increase is the removal of subsidies in Mendoza. my gas bill is less than $5 USD monthly since i'm not using much now, but my Electricity bill with using a mini-split daily for the past 2 months has caused my Luz to go from 15,000 Pesos to 130,000 Pesos per month (some people were paying $10 USD/month for electricity last year! now $108 USD/month tracks more closely to a family using a decent amount of electricity monthly (415 kWh). i think local Nuclear power will fix this in the next decades, but who knows if Argentina has the will to de-regulate the industry. maybe a good hedge would be to buy a solar panel and run my primary bedroom Split A/C only on solar? (not needed at night if you pre-cool the room while the sun is up, perhaps). i suspect using gas as heat soon instead of needing A/C will get my bill very low again, sub-50-dollars per month is my goal for a 160-sqmt house.
I had heard that electricity in Mendoza (and outside of Buenos Aires is much more expensive vs. BA and your bill proves it. $108 USD for 415 kWh? Electricity was always crazy cheap so no one thought about solar but now some people are inquiring about it. It never made sense in Argentina before because with the import taxes it was crazy the cost of the panels and electricity is so cheap but if they keep going up to match normal market prices around the world then it will make sense. I have 50 panels on my house and it's awesome since electricity is so expensive in Southern California.

but 80% of my spending is converting Dollars to Pesos weekly on Santander's app, then withdrawing some cash for the once-a-week cash discounts i need (eggs, fruit stands, etc.), but my main spending is using the MODO app to get 40% off on butchers and veggie stores on the weekend, 35% for many businesses, and many other discounts like 25% at Carrefour on Fridays using the MODO app and an argentine Visa debit card as payment method. i am getting crazy cheap food and items compared to before i had access to MODO (needs my lady's DNI to use MercadoPago and MODO and have a US Dollar account in Argentina).

let me know if you guys want any other price comparisons in Mendoza. here's some to-go deals for @earlyretirement at a nice cafe/restaurant in a central location here in Mendoza:
Yes, Modo can save a lot of money. In Buenos Aires while I was there in January there were some days they were giving 30% off using Modo or Mercado Pago but they would cap the total discount. But still great for saving. Seems like each day of the week they were offering deals. The supermarkets were mostly dead. I found prices to be expensive on most things for the household. I didn't buy groceries as I wasn't cooking but I was furnishing 4 apartments so buying stuff for the apartment and cleaning supplies and stuff and crazy some of the amount they are charging when you factor in the low salaries there.

Thanks for posting those menu prices. It's clear that restaurants are much cheaper in Mendoza vs. BA. I hope you're doing well @StatusNomadicus. Mendoza sounds like it has been a great move. A very nice area.
 
I haven't been to Mendoza for a while but it was always cheaper than BA. But I would guess in the higher end restaurants it probably matches BA's inflation. Coffee seems cheaper there. Here there are occasional deals but mostly expensive now. Once you a while if you look around 3k peso coffee deals but some places are just insane. I doubt they are busy enough to keep getting it.

Before in Palermo lots and lots of tourists but I see less and less.
 
one big increase is the removal of subsidies in Mendoza. my gas bill is less than $5 USD monthly since i'm not using much now, but my Electricity bill with using a mini-split daily for the past 2 months has caused my Luz to go from 15,000 Pesos to 130,000 Pesos per month (some people were paying $10 USD/month for electricity last year! now $108 USD/month tracks more closely to a family using a decent amount of electricity monthly (415 kWh). i think local Nuclear power will fix this in the next decades, but who knows if Argentina has the will to de-regulate the industry. maybe a good hedge would be to buy a solar panel and run my primary bedroom Split A/C only on solar? (not needed at night if you pre-cool the room while the sun is up, perhaps). i suspect using gas as heat soon instead of needing A/C will get my bill very low again, sub-50-dollars per month is my goal for a 160-sqmt house.
Wow! Am I reading this right that 415 kwh was $108 dollars? That doesn't seem correct. 415 kwh doesn't seem like much at all. That would make electricity as expensive as many areas in the States. Can you double check that? If so, sounds like electricity in Mendoza is much more than Buenos Aires.
 
crazy! Santander right now shows (Monday morning 10Mar2025) MEP of 1,209.59 to sell Dollars on the app (my main go-to now when i need Pesos). so basically it's the same as the rate you just got, and i don't have the risk of holding physical $100 USD bills, don't have to walk, and i can track the history of the rates on the app. my ARS/USD app shows the Blue Dollar is currently 1,215, for comparison. i did a sale at 1,231 ARS/USD last week, so i'll wait until it goes up again to get some Pesos. but mostly, it's interesting that some prices are going up in Pesos the past 3 months, because when i started selling Dollars with Santander, the first week of January 2025 i got 1,147 and now the rate is above 1,200 for the current MEP, which to me makes sense that this +5% increase in MEP rates tracks with the increase in Peso prices (but most things for me are the same cost in Dollars).
You are right. I just looked and the Blue, CCP and MEP are almost all the same now.

exchange.jpg
 
percentage-wise on the touristy streets?
i'd say like 1.6x from the signs i've seen, but i never go to places with high prices. i ate my 2nd-best-ever Lomito last weekend with a buddy from the pool/gym, and we paid 32,000 Pesos for a MASSIVE amount of food, probably 3 people eating to max, and a 2.25L soda, plus tip, on a Sunday, in a suburb called Godoy Cruz at a nice family parilla. so about $12 USD per person maybe at that MEP rate then? still "expensive" but man was it fantastic and i ate so much i wasn't hungry for the next meal 😛

i've thought about trying to have my lady bring back a flexible panel to try it out. i know the most ideal setup would be in sunny Mendoza to have 2 panels or whatever it takes per Split a/c unit, then you could heat and cool as needed since it's completely sunny like 300 days out of the year here. for sure when subsidies are fully gone, in the interim between local small-scale nuclear, Solar could be a thing! what Argies need really is just dual-pane glass, insulation, and caulking hahahahahah

I hope you're doing well @StatusNomadicus. Mendoza sounds like it has been a great move. A very nice area.
when i get a second place, i would love to host your fam on a trip here. or if you end up here for business, the lower level is yours, no worries...my father-in-law cancelled on coming here this year, so it's not luxurious but we have a nice place and of course the best dog to have coffee with in the morning : )

Here there are occasional deals
always are deals, if you don't buy impulsively and have a mind for savings. and yes going to expensive restaurants is expensive, but cooking is overwhelmingly cheap in 95% of cases. flour, beans, stew beef, eggs, sugar, etc. are fantastically cheap in Dollars (which every Argie has saved)

some places are just insane. I doubt they are busy enough to keep getting it.
Before in Palermo lots and lots of tourists but I see less and less.
eh, supply and demand follows the law of scarcity; there obviously are enough people, otherwise the restaurant wouldn't be open. we can't have it both ways; no tourists anywhere and BsAs is a poor wasteland, but also luxury restaurants and cafes are charging high prices. the contradiction is due to one of those premises being wrong 😛

415 kwh was $108 dollars?
sure thing, checking meow...maybe you can do the rough numbers (see attached), hopefully i'm not doxxing myself, since radical leftists have a penchant for trying to destroy people's lives over political opinions 🤐

we don't have a Rates problem here, we have a TAX problem...part of that 259k Pesos is 79k Pesos in taxes!!! what is that, like 30%????

Blue, CCP and MEP
today's update 28Mar2025 is:

Blue 1280-1300
Official 1043-1103
MEP 1299.77 (almost exactly the psychological/arbitrary 1300!)
Crypto 1313
and Santander's "Dólar MEP" instant convert 1291-1299 (Venta/Compra)
 

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...and for those who are about to get their DNI, check out the sweet perks - never go to a Cueva again! just have a Dollar account, and when rates are good, sell USD to buy ARS. attached screenshot of how easy it is. anyone else in the oldtimer group have a better bank/system for getting Pesos? i don't need Pesos that much, but this has been working great for me the past year (attached screenshot)
 

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sure thing, checking meow...maybe you can do the rough numbers (see attached), hopefully i'm not doxxing myself, since radical leftists have a penchant for trying to destroy people's lives over political opinions 🤐

we don't have a Rates problem here, we have a TAX problem...part of that 259k Pesos is 79k Pesos in taxes!!! what is that, like 30%????
Wow that electricity rate is not cheap! That makes it about 24 cents per kwh yes? That is USA prices. Heck even more than some states here.
That seems very high for locals that don't make much. What is the local reaction? $200 USD bill in your place that you said isn't too big? I could easily see like $500 US bills in bigger places?

...and for those who are about to get their DNI, check out the sweet perks - never go to a Cueva again! just have a Dollar account, and when rates are good, sell USD to buy ARS. attached screenshot of how easy it is. anyone else in the oldtimer group have a better bank/system for getting Pesos? i don't need Pesos that much, but this has been working great for me the past year (attached screenshot)
But my Argentine friends do not like doing anything through their banks because the government sees all of that. They just use cash. Not because it is a better rate but more for privacy reasons they tell me.
 
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