Banking What is going on with the Blue dollar? Why is it going down?

[Vince]

So, today the Central Bank scooped up 23 million dollars, and that might just make the blue dollar keep going up.

Plus, their reserves are dropping, which freaks people out about the peso's stability. When folks feel like the peso isn’t safe, they rush to buy dollars, and that pushes the blue dollar price even higher. So yeah, with these buys, I wouldn’t be surprised if the blue dollar just keeps climbing.

Dólar hoy: la cotización libre avanzó a $1.240 para la venta

El dólar “blue” cerró ofrecido con alza de 15 pesos este lunes. Pasó una ganancia marginal de cinco pesos o 0,4% en el transcurso de octubre. La brecha cambiaria creció al 26%. El BCRA compró USD 23 millones en el mercado

www.infobae.com

Let's see if they can build up any significant reserves. Net reserves are still negative.

 

[Uncle Wong]

Let's see if they can build up any significant reserves. Net reserves are still negative.

This is something I don't understand. With the currency controls in place how can the Central Bank build up reserves?

 

[Finance Prof]

This is something I don't understand. With the currency controls in place how can the Central Bank build up reserves?

They can't. That's the problem.

 

[Larry]

They can't. That's the problem.

The game will eventually end.

 

[David]

The game will eventually end.

I just don't understand how Argentina can have such high inflation in Dollars. The Argentina treasury department issues debt that yields 24% in dollars. The market has sucked up the pesos. With those pesos it buys dollars from the Central Bank. Those dollars are put to work in the USA as a guarantee for the bonds. The "debt" sounds like it is still growing.

What am I missing here?

 

[Blockchain]

I just don't understand how Argentina can have such high inflation in Dollars. The Argentina treasury department issues debt that yields 24% in dollars. The market has sucked up the pesos. With those pesos it buys dollars from the Central Bank. Those dollars are put to work in the USA as a guarantee for the bonds. The "debt" sounds like it is still growing.

What am I missing here?

This is what it looks like. Under their current scheme it doesn't sound like the debt is going down. Many in Argentina think the same thing. I follow this guy on X and he has been sounding the alarm.

https://twitter.com/x/status/1850309483370832243

 

[Vince]

Here is a great article on the carry trade issue. My guess is once people start rushing out it will go quickly and a race to the exits same as before.

Carry That Weight

Will we see the end of the peso carry trade once fx restrictions get lifted?

www.bowtiedmara.io

 

[legend]

It's incredible that the dollar is dropping so much, a little each day. Will they equalize soon? It's 1105 today to exchange my dollars. 😥

 

[DaisyM]

I need to exchange dollars tomorrow to cover some expenses, didn’t realize it had dropped so much... our money keeps losing value here.

 

[shein]

There’s almost no difference between the blue and MEP dollar now... today it remains the same as yesterday.

 

[overstayed]

There’s almost no difference between the blue and MEP dollar now... today it remains the same as yesterday.

View attachment 7980

From what I am told the exchange rate is all distorted because of all this cash from the amnesty. I wonder how things will go with exchange rate once the amnesty ends? My friends are having to pay 5% to wire in funds with the cuevas since there is so much demand for dollars. So even though the government isn't charging them it is wild that cuevas are charging 5% to bring cash into Argentina so they can deposit it into banks. Wild!

 

[Jenn]

What will happen to the exchange rate if they end currency controls? Won't the peso collapse?

 

[Ross]

If currency controls are lifted, the peso is likely to weaken at first. Without restrictions, people would seek more dollars, causing the peso to lose value. However, it doesn't necessarily mean it will collapse. It depends on several factors.

For example, if the government implements good economic policies, like controlling inflation or making reforms, people could regain confidence in the peso, preventing a sharp decline. Also, if Argentina attracts foreign investment or increases exports, there would be more dollars available, which would help support the peso.

Initially, there will be a devaluation, but if things are handled well in the long term, a floating exchange rate could help the economy adjust more naturally, without relying too much on controls. In short, yes, the peso could drop, but it won't necessarily collapse if the right decisions are made.

 

[Leo]

Today I went to exchange some dollars to cover my expenses for the month, and they paid me 1110. That was earlier today, and I see that it has dropped again.

 

[greiger]

According to Milei's plan, the dollar could reach $ 1001 by early January 2025.

A cuánto podría llegar el dólar a principios de 2025, según el mercado y el plan de Milei

Un relevamiento del Banco Central refleja las expectativas de los analistas para los próximos meses, con un foco en el tipo de cambio y la inflación. Las consultoras realizaron ajustes en sus proyecciones para los primeros meses del año que viene

www.infobae.com

 

[Vince]

According to Milei's plan, the dollar could reach $ 1001 by early January 2025.

View attachment 8020

A cuánto podría llegar el dólar a principios de 2025, según el mercado y el plan de Milei

Un relevamiento del Banco Central refleja las expectativas de los analistas para los próximos meses, con un foco en el tipo de cambio y la inflación. Las consultoras realizaron ajustes en sus proyecciones para los primeros meses del año que viene

www.infobae.com

My wife's family is buying as many dollars that they can at these prices with the peso where it is. Anyone's guess where things will be by this time next year but everyone I know is stacking dollars right now.

 

[Surfer]

My wife's family is buying as many dollars that they can at these prices with the peso where it is. Anyone's guess where things will be by this time next year but everyone I know is stacking dollars right now.

That is the same with friends I know in Argentina. Even though the peso has been strong, my friends are still taking their salaries and buying dollars. They tell me it is very cheap now to buy dollars. One friend told me about high interest rates the banks were paying many years ago. She said she deposited them and got the high interest rate but then it devaluated so much that she lost money instead of just savings dollars.

Even though people are saying this time is different, she said it is not healthy that the peso is so high.

It is shocking how expensive some restaurants are. I would have to believe that many either need to reduce their prices or go out of business. I noticed this week many places are much slower than my last trip. I wonder what the profit margins are like in some of these places. Before they could use the excuse inflation was so high so they could keep raising their prices. The government is saying inflation is slowing down but prices sure don't seem like it.

 

[Vero]

My wife's family is buying as many dollars that they can at these prices with the peso where it is. Anyone's guess where things will be by this time next year but everyone I know is stacking dollars right now.

I am doing the same thing. Our income is in pesos and at these prices we are buying as many dollars as we can each month. Exchange rate on blue market does not feel normal. No matter if the government buy or sell dollars the exchange rate almost doesn't move. I did not trust the previous government and I do not trust this one completely either.

It is shocking how expensive some restaurants are. I would have to believe that many either need to reduce their prices or go out of business. I noticed this week many places are much slower than my last trip. I wonder what the profit margins are like in some of these places. Before they could use the excuse inflation was so high so they could keep raising their prices. The government is saying inflation is slowing down but prices sure don't seem like it.

It is not busy like before but restaurants and cafes do not lower prices. I paid almost $4 dollars for a coffee today in Palermo. It is cheaper in States now for coffee when I visit my daughter.

True about inflation excuse before but inflation is still high for building expenses and water and gas and electricity. So restaurants can't lower prices.

 

[Uncle Wong]

I am doing the same thing. Our income is in pesos and at these prices we are buying as many dollars as we can each month. Exchange rate on blue market does not feel normal. No matter if the government buy or sell dollars the exchange rate almost doesn't move. I did not trust the previous government and I do not trust this one completely either.


It is not busy like before but restaurants and cafes do not lower prices. I paid almost $4 dollars for a coffee today in Palermo. It is cheaper in States now for coffee when I visit my daughter.

True about inflation excuse before but inflation is still high for building expenses and water and gas and electricity. So restaurants can't lower prices.

I wonder how this situation is sustainable? I would understand if salaries are higher but you can't have a situation where a coffee or meal is even more expensive than Europe or US. I know salaries seem like they are increasing as I read reports of different industries raising salaries but they aren't going up enough to match these prices.

It is hard to believe MIlei's popularity and ratings are still high. My friends that I know in BA seem optimistic but at the same time complaining they can't afford to go out to eat much anymore. As one friend told me. Things are either going to end up really really good or really really bad.

 

[Blockchain]

I see the blue rate and the official rate are almost the same. When will the government get rid of the currency controls. This feels all manipulated to me. All my local friends in Argentina tell me it is a mirage and the government is controlling the rate. When will they end the controls? And what will happen once they do? I read the IMF is requiring that before they will give more money or restructure another deal.