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

[legend]

Analysts say things could get tougher next year. This is because the dollar in countries like Brazil dropped, while the Argentine peso went up, making the economy more complicated. If the government makes a deal with the IMF, there could be fewer dollars in the market, but more money coming in through other sources, like foreign investments. However, they don’t expect the government to lift restrictions on the dollar or go back to borrowing from international markets.

As for the dollar, it doesn’t seem like it will drop much. Even though the economy might improve a bit, the peso is still very weak compared to other currencies, so things will remain expensive.

¿Será el 2025 un año de deflación en dólares para la Argentina?

A lo largo de 2024 la economía argentina pasó de ser barata a encarecerse en dólares. El billete norteamericano perdió más de 40% de poder de compra y fue de las peores inversiones. Por qué los analistas advierten un escenario diferente para el año que viene

www.infobae.com

 

[daveholman]

I know I need cash for some things. The idea of spending a large chunk of my life in a cueva is not appealing.

 

[Blockchain]

Blue dollar just hit 1,240 today! Woo hoo! Hopefully it goes back up to 1,500 by the time I come back in February.

 

[earlyretirement]

Opinions! With the MEP rate so close to the Blue rate, is it better to use a no transaction fee credit card as much as possible, to conserve cash, (which is a hassle to convert) for when it's necessary?

I always recommend seeing what works out the best. The options are using a Cueva to wire/Zelle/stablecoins or Western Union or using your foreign credit card. I usually just use a credit card with no forex fees for the convenience of not having to deal with exchanging. After all, there is a time factor which time=money.

@daveholman, you can use this website which typically will give you the actual rate using your foreign Visa/Mastercard and also blue and WU rates. Just keep in mind the blue dollar rate may lag by a few hours.

ARS Rates - Check Argentina Blue Dollar Rate Easily

View the latest exchange rates for the Argentine Peso against the US dollar, including the official rate, Blue Dollar, VISA, MasterCard, and Western Union rates.

app.ggomma.xyz

 

[Betsy Ross]

I think it’s best to combine both. Personally, I use my credit card for everyday expenses when the MEP and Blue rates are close, it saves the hassle of exchanging cash. But it’s always smart to keep some physical dollars as a backup for emergencies or big purchases since cash remains crucial in such a volatile economy. Just to give you an idea, today I exchanged some dollars and got 1,190 ARS per dollar, but now it’s already at 1,230. That shows just how unpredictable things can be!...In fact, there’s currently a slightly more significant difference between the Blue and MEP rates, which makes it even more unpredictable.


View attachment 8341

I also exchanged some this morning to pay some bills and got 1,200 and then it jumped up to 1,240 by the end of today. I'm not sure if they are offering that in the cuevas? Has anyone exchanged money today? What is the best rate they are offering now? Saw it hit 1,240 today.

I know I need cash for some things. The idea of spending a large chunk of my life in a cueva is not appealing.

Me too. I only do that if I have big bills to pay but some of my bills don't take credit cards so I always exchange. Trick is not to exchange too much at once.

 

[earlyretirement]

Many economists and financial experts continue sounding the alarm on the overvalued peso. This time from former Minister of the Economy, Domingo Cavallo.

https://www.cronista.com/finanzas-mercados/la-advertencia-de-cavallo-sobre-la-apreciacion-exagerada-del-peso-que-pasara-con-el-dolar/

 

[Digital Nomad]

Many economists and financial experts continue sounding the alarm on the overvalued peso. This time from former Minister of the Economy, Domingo Cavallo.

View attachment 8353

https://www.cronista.com/finanzas-mercados/la-advertencia-de-cavallo-sobre-la-apreciacion-exagerada-del-peso-que-pasara-con-el-dolar/

Everyone says the peso is too high but it doesn't look like anything can be done about it until the peso floats. 20% seems low to me. My girlfriend's father who owns a few businesses here said the peso should be at least to 1,500 by now which is about 25%. He said minimum 25% to 35% lower.

 

[Avocado]

Many economists and financial experts continue sounding the alarm on the overvalued peso. This time from former Minister of the Economy, Domingo Cavallo.

View attachment 8353

https://www.cronista.com/finanzas-mercados/la-advertencia-de-cavallo-sobre-la-apreciacion-exagerada-del-peso-que-pasara-con-el-dolar/

The problem is when it adjusts it causes chaos. Inflation jumps back up.

 

[daveholman]

The problem is when it adjusts it causes chaos. Inflation jumps back up.

I read somewhere they will attempt a "dirty float" later this year. But it takes the Central Bank having significant USD holdings. That is a managed float, where the bank sets a range, and the peso is allowed to float in that range (which gets adjusted over time). As long as the bank has enough dollars to defend the peso, it can work. But if not, look up "Asian Contagion" for an object lesson in how it can go wrong.

 

[Avocado]

I read somewhere they will attempt a "dirty float" later this year. But it takes the Central Bank having significant USD holdings. That is a managed float, where the bank sets a range, and the peso is allowed to float in that range (which gets adjusted over time). As long as the bank has enough dollars to defend the peso, it can work. But if not, look up "Asian Contagion" for an object lesson in how it can go wrong.

I worry for what happen to Argentina if Brazil currency keep going down. That contagion got Argentina with problems in past. I also hear about dirty float but not surprised. People say Argentina improved so much but I don't see any improvements yet. Sure inflation go down a little but if the exchange rate not true value then it not real I don't think.

If the currency devalue then price go back up again.

 

[Pink Panther]

I read somewhere they will attempt a "dirty float" later this year. But it takes the Central Bank having significant USD holdings. That is a managed float, where the bank sets a range, and the peso is allowed to float in that range (which gets adjusted over time). As long as the bank has enough dollars to defend the peso, it can work. But if not, look up "Asian Contagion" for an object lesson in how it can go wrong.

I am not sure how the lower classes are making it. It is very expensive here now. My monthly condo bill is up to $600 dollars a month. It was going up by $100 a month for a few months. This is the first month it did not go up. This is not sustainable. We only have 50 units in our building and 15 of them are late paying the expensas.

 

[daveholman]

I am not sure how the lower classes are making it. It is very expensive here now. My monthly condo bill is up to $600 dollars a month. It was going up by $100 a month for a few months. This is the first month it did not go up. This is not sustainable. We only have 50 units in our building and 15 of them are late paying the expensas.

$600 is just your expensas? Or rent plus expensas?

 

[Pink Panther]

$600 is just your expensas? Or rent plus expensas?

Just expense! I own my apartment so I do not have a rental expense. The biggest expense is for the 24/7 security guards. I am trying to get all the owners to get rid of this. The building is in Palermo Chico and a very safe area. The building has a pool and small gym but the bulk of the expenses is the security guards.

 

[earlyretirement]

Just expense! I own my apartment so I do not have a rental expense. The biggest expense is for the 24/7 security guards. I am trying to get all the owners to get rid of this. The building is in Palermo Chico and a very safe area. The building has a pool and small gym but the bulk of the expenses is the security guards.

HOA inflation has been just horrible this past year. I agree with you Pink that it is not sustainable to keep raising the way some buildings are. But it's not all buildings. I have an apartment in Recoleta and we have a live in doorwoman but no other employees the the HOA dues are reasonable. The one where they kill you are buildings with 24/7 security and around the clock staff. I have a studio apartment in Palermo Hollywood and it's about 400,000 pesos per month ($335 USD). So definitely if you have a bigger apartment with not many in the building it can go up.

But inflation has finally slowed down on my HOA bill in my Palermo Hollywood unit. This was the first month it hasn't jumped up a huge amount. Hopefully this trend continues.

 

[Johnny]

HOA inflation has been just horrible this past year. I agree with you Pink that it is not sustainable to keep raising the way some buildings are. But it's not all buildings. I have an apartment in Recoleta and we have a live in doorwoman but no other employees the the HOA dues are reasonable. The one where they kill you are buildings with 24/7 security and around the clock staff. I have a studio apartment in Palermo Hollywood and it's about 400,000 pesos per month ($335 USD). So definitely if you have a bigger apartment with not many in the building it can go up.

But inflation has finally slowed down on my HOA bill in my Palermo Hollywood unit. This was the first month it hasn't jumped up a huge amount. Hopefully this trend continues.

Wow $335 bucks per month seems like a lot for a small apartment. I talked to some people that are paying that as a monthly rent in some neighborhoods! Obviously not in the touristy areas. I am glad my new apartment doesn't have security guards at night. My building has security cameras and a video camera at the lobby with a remote worker. I still haven't gotten an hoa bill yet so not sure what my expense will be.

 

[daveholman]

Just expense! I own my apartment so I do not have a rental expense. The biggest expense is for the 24/7 security guards. I am trying to get all the owners to get rid of this. The building is in Palermo Chico and a very safe area. The building has a pool and small gym but the bulk of the expenses is the security guards.

Wow! I've been looking at smaller apartments, but even those with a pool and a SUM, etc, the expensas are only $200ish

 

[Digital Nomad]

Wow! I've been looking at smaller apartments, but even those with a pool and a SUM, etc, the expensas are only $200ish

It just depends on each building. Just remember that sometimes the prices on the listing are completely wrong. When I was looking I was seeing some prices on Zonaprop and the real expenses were double what they were publishing. I'm not sure if they lied to attract more people but ask to see the actual last bill.

 

[Uncle Wong]

It just depends on each building. Just remember that sometimes the prices on the listing are completely wrong. When I was looking I was seeing some prices on Zonaprop and the real expenses were double what they were publishing. I'm not sure if they lied to attract more people but ask to see the actual last bill.

The same thing for properties for sale. I was looking at a few places and then when I asked them what the last expense was they showed me and it was double. Remember that the condo fees doubled or more just since earlier this year. Some of the places I was looking to purchase the hoa fees jumped up over 100% since a few months ago!

 

[Finance Prof]

Just expense! I own my apartment so I do not have a rental expense. The biggest expense is for the 24/7 security guards. I am trying to get all the owners to get rid of this. The building is in Palermo Chico and a very safe area. The building has a pool and small gym but the bulk of the expenses is the security guards.

That has to be a fairly large apartment if the expenses are so high. Most of my friends that pay this much are in buildings that don't have many units. Many apartments in Recoleta or Palermo that have security guards around the clock and amenities can have high expenses. I have a friend that owns a large apartment in Puerto Madero and his monthly fees are almost $2k dollars per month.

Wow! I've been looking at smaller apartments, but even those with a pool and a SUM, etc, the expensas are only $200ish

That is decent if there is a pool and gym. The less staff they have the less bills are but with security around the clock, door person it will be more.

It just depends on each building. Just remember that sometimes the prices on the listing are completely wrong. When I was looking I was seeing some prices on Zonaprop and the real expenses were double what they were publishing. I'm not sure if they lied to attract more people but ask to see the actual last bill.

Correct. Even when I bought a long time ago the amounts listed were all wrong. I would guess most 1 bedroom apartments with pools and security staff around the clock are going to be between $200 to $300 dollars per month.

Expenses have really gone up this year but the last 2 months I am finally seeing stability.

 

[VINO]

Opinions! With the MEP rate so close to the Blue rate, is it better to use a no transaction fee credit card as much as possible, to conserve cash, (which is a hassle to convert) for when it's necessary?

I try to just use my foreign credit cards that don't have transaction fees. It can be a hassle to wait in line, go to WU, cueva. I always have to have some cash but I try to eliminate it as much as possible.

I keep thinking the peso has to devalue. I know Argentina is improving but the peso value seems out of whack to me. It is strange to me that everyone admits the peso is too high. Everyone! My banker friends, my accountant friends, my lawyer friends. Everyone! I asked them what the fair value is and most people are saying at least 1500 to 1600. But they say until the cepo happens it won't go down.

I don't understand the dynamics but just hoping it comes down and the blue dollar gets stronger.

Read some articles that say the same thing that it is strong but that it can stay like this a while.

Inflation, dollar, consumption: here’s what Argentina’s consultancies expect in 2025 - Buenos Aires Herald

Analysts expect the economy to grow even as inflation cools — but the exchange rate is a significant incognito

buenosairesherald.com