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

[Blockchain]

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

Last year seemed like it was too weak but now it seems too strong. Poor people that earn pesos. I don't really have much sympathy for expats or foreigners making dollars. But can't imagine making peso incomes there. Even with the peso stronger these prices in dollars are tough. Read this today. I wonder at what point the Central Bank starts worrying or will admit it is too strong? I saw Milei mentioned it a few weeks ago.

Hurt by high prices, Argentines seek cheaper goods abroad

In the shopping malls of the Chilean capital and the famous beaches of Brazil, Argentines are looking to snap up various goods, from clothes to...

www.dailysabah.com

 

[Ron]

The eternal tango between the peso and the dollar. As someone who’s seen a few economic cycles, I can tell you this: there’s no such thing as a ‘perfect’ exchange rate, especially in Argentina. When the peso is weak, it’s a disaster for savers and those who rely on imports. When the peso is strong, it crushes exports and makes life impossible for those earning in pesos.

The Central Bank handling this balance? They’ll probably only admit the peso is too strong when exporters start shouting loud enough or when reserves hit a critical level. That Milei mentioned it is interesting, but one thing is rhetoric and another, action. We’ll have to see if his team has a real plan or if it’s just more noise. In the meantime, for those earning in pesos… hang on tight. It’s going to be a rollercoaster.

 

[Vero]

The eternal tango between the peso and the dollar. As someone who’s seen a few economic cycles, I can tell you this: there’s no such thing as a ‘perfect’ exchange rate, especially in Argentina. When the peso is weak, it’s a disaster for savers and those who rely on imports. When the peso is strong, it crushes exports and makes life impossible for those earning in pesos.

The Central Bank handling this balance? They’ll probably only admit the peso is too strong when exporters start shouting loud enough or when reserves hit a critical level. That Milei mentioned it is interesting, but one thing is rhetoric and another, action. We’ll have to see if his team has a real plan or if it’s just more noise. In the meantime, for those earning in pesos… hang on tight. It’s going to be a rollercoaster.

President Milei warned a few weeks ago about the dangers of a peso that is too high but haven't seen much since then. Prices in dollar terms are very expensive. I worry that even when inflation slows down things continue to get expensive. Things don't work normally in Argentina.

 

[Uncle Wong]

President Milei warned a few weeks ago about the dangers of a peso that is too high but haven't seen much since then. Prices in dollar terms are very expensive. I worry that even when inflation slows down things continue to get expensive. Things don't work normally in Argentina.

I wonder about this. Do prices ever come down once they go up? It doesn't seem like prices ever go down once they are raised. The USD has gotten stronger everwhere around the world except Argentina and they seem to have as many problems there as always. In a culture when people are accustomed to raising prices all the time I wonder if it will stop now that inflation is slowing down.

I would think there is a limit to how high they can go.

 

[earlyretirement]

I wonder about this. Do prices ever come down once they go up? It doesn't seem like prices ever go down once they are raised. The USD has gotten stronger everwhere around the world except Argentina and they seem to have as many problems there as always. In a culture when people are accustomed to raising prices all the time I wonder if it will stop now that inflation is slowing down.

I would think there is a limit to how high they can go.

That is the tricky part in Argentina that stores don't like reducing their prices once they raise them. Common sense and supply and demand fundamentals often don't work in Argentina. Some stores would rather go out of business than mark down their prices.

Many things like furniture there is no inventory so they don't start making it until you put down a deposit. It's strange because rather than price reasonably and sell more volume stores are stubborn and will keep prices high. I've seen it happen many times before.

Some things in the supermarket the prices are coming down or they will have tons of promos with various firms (Modo, La Nacion discount, Mercado Pago, Uala, etc). What I notice is that many, many products are just sitting around. If you walk down a big supermarket aisle, you will often see all the products on the shelves with barely anything taken.

I've been going into Coto almost every day and it's surprising how not many people are buying much stuff. Everyone has their limit and prices just can't keep being raised. Especially when inflation is slowing down.