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It's on a tear! Up about 7.5% just the first few days of July.
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Banking What is going on with the Blue dollar? Why is it going down?
- Thread starter James Bond
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Avocado
Well-known member
Read this. Milei try to blame Massa for blue dollar move. It say there is a way for blue dollar to go to 4,000 to $1 US. 
www.clarin.com
En la Rosada le apuntan a Massa por la venta de "puts" y dicen que el dólar se iría a $ 4.000 si se ejecutan todos esos bonos
Lo acusan de querer desestabilizar al Gobierno, a través de operaciones del Banco Macro. La respuesta del ex ministro de Economía.
www.clarin.com
Finance Prof
Well-known member
That's not going to happen any time soon. Still many challenges. The FT had a good article today.Read this. Milei try to blame Massa for blue dollar move. It say there is a way for blue dollar to go to 4,000 to $1 US.
En la Rosada le apuntan a Massa por la venta de "puts" y dicen que el dólar se iría a $ 4.000 si se ejecutan todos esos bonos
Lo acusan de querer desestabilizar al Gobierno, a través de operaciones del Banco Macro. La respuesta del ex ministro de Economía.
The Achilles heel has been the anchoring of the exchange rate policy to a 2 per cent rate of crawl per month, significantly below the average inflation rate. The negative real interest rate is also now a liability. This combination was smart and useful in the initial stages, as it allowed for rapid disinflation, a quick accumulation of international reserves and a reduction of the real value of central bank liabilities. But now, as the real exchange rate is reaching pre-devaluation levels, it is not providing the financial incentives for exporters and other economic agents to turn their dollars into pesos.
This in turn is generating significant pressures in Argentina’s financial markets. Confronted with this situation, Milei’s government is committed to defending the 2 per cent crawl and continues to equate success with large drops in monthly inflation rates. Previous Latin American governments felt compelled to exaggerate their commitment to a fixed exchange rate because their will to adjust economic fundamentals was mild or non-existent. However, in this case, Argentina has set the fundamentals in place and is mistakenly putting its achievements at risk through a disorderly currency adjustment.
To regain market confidence and redirect its stabilisation efforts, the government needs to move to the second stage of its programme. In this phase, disinflation will happen at a slower pace and the government will focus on economic recovery instead. By doing so, Argentina will be able to follow a more sustainable stabilisation path, such as the ones its Latin American peers experienced in the 1990s.
The Milei government needs to set out a clear commitment not to dollarise the economy and to support its currency competition strategy by strengthening the institutions and policies that will allow the peso to overcome the dollar as the currency of choice of Argentines. To do so, the government should send an amendment of its fiscal responsibility law to Congress as soon as possible. This update should establish a zero deficit as its fiscal target for the years to come and should enshrine the central bank’s independence.
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Flamingo
Well-known member
Well they will need to figure something out. I laughed as I had an old article from before the elections bookmarked from October 10, 2023.That's not going to happen any time soon. Still many challenges. The FT had a good article today.
The Achilles heel has been the anchoring of the exchange rate policy to a 2 per cent rate of crawl per month, significantly below the average inflation rate. The negative real interest rate is also now a liability. This combination was smart and useful in the initial stages, as it allowed for rapid disinflation, a quick accumulation of international reserves and a reduction of the real value of central bank liabilities. But now, as the real exchange rate is reaching pre-devaluation levels, it is not providing the financial incentives for exporters and other economic agents to turn their dollars into pesos.
This in turn is generating significant pressures in Argentina’s financial markets. Confronted with this situation, Milei’s government is committed to defending the 2 per cent crawl and continues to equate success with large drops in monthly inflation rates. Previous Latin American governments felt compelled to exaggerate their commitment to a fixed exchange rate because their will to adjust economic fundamentals was mild or non-existent. However, in this case, Argentina has set the fundamentals in place and is mistakenly putting its achievements at risk through a disorderly currency adjustment.
To regain market confidence and redirect its stabilisation efforts, the government needs to move to the second stage of its programme. In this phase, disinflation will happen at a slower pace and the government will focus on economic recovery instead. By doing so, Argentina will be able to follow a more sustainable stabilisation path, such as the ones its Latin American peers experienced in the 1990s.
The Milei government needs to set out a clear commitment not to dollarise the economy and to support its currency competition strategy by strengthening the institutions and policies that will allow the peso to overcome the dollar as the currency of choice of Argentines. To do so, the government should send an amendment of its fiscal responsibility law to Congress as soon as possible. This update should establish a zero deficit as its fiscal target for the years to come and should enshrine the central bank’s independence.
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www.ft.com
"The peso is a currency emitted by Argentine politicians, so it can't be worth excrement, because those pieces of trash don't even work as fertilizers," he said Monday, warning citizens to not hold savings in the local currency.
- Javier Milei
Argentine peso hits record low as Milei says 'it can't be worth excrement' while businesses oppose dollarization
"Those pieces of trash don't even work as fertilizers," presidential frontrunner Javier Milei said of pesos.
Blockchain
Well-known member
Crazy how quickly things change here. It is funny to see the thread name questioning why the blue dollar is so weak and a few months later people asking why it's so strong. I get there are problems with the economy but why all of a sudden is it getting so crazy? Any explanations?
earlyretirement
Moderator
Things can change very quickly in Argentina. But also things can take forever to change at the same time. Right now there are a few various reasons. There was a good article today on it.
El dólar blue llegó a $1500 y marcó un nuevo máximo: las cinco razones que explican la suba | TN
La cotización paralela aceleró el alza en los últimos días y la brecha con el tipo de cambio oficial se amplió hasta el 60%. Factores estacionales y desequilibrios macroeconómicos se combinaron para renovar la tensión.
It's still dropping today in the black market; the exchange rate is $1385. You're right about the economy, things can change drastically from one moment to the next.
www.cronista.com
Expectativa por el dólar blue: este es el precio que hoy anticipan las cuevas virtuales
El mercado cripto ofrece una alternativa digital al dólar billete que en las últimas horas cayó por debajo de los $ 1.400. ¿De qué se trata?
www.cronista.com
Vero
Well-known member
Don't exchange more than you need. Not sure how long you will be in Buenos Aires but probably a good idea to exchange a few hundred dollars at a time or if you're staying long term, enough to cover expenses for 1 month.
According to Caputo, "People will have to sell dollars to pay taxes, and the peso will become the strongest currency." We'll see if that actually happens...
Pink Panther
Well-known member
If he really thinks that he is welcome to cash in his stash of US dollar savings and liquidate and buy pesos right now. No thanks. I think I will take my chances and just sell dollars as needed.
I know Caputo's idea is now a utopia, but look who's laughing at him... My god, ma'am, you should call for silence. You have no moral authority to criticize anything.
import export
Well-known member
I'm NO fan of CFK but she has a good point. Milei and Caputo have been saying that they were going to dollarize. That was their promise when he ran for President.
Digital Nomad
Well-known member
Sounds like not everyone is struggling to put food on the table. Interesting article about the shopping frenzy over to Chile.
www.bnnbloomberg.ca
The 23-Hour Shopping Frenzy: Argentines Stampede Over Border
Argentina’s currency has become so strong that it’s given rise to a cottage industry catering to people looking to shop in Chile
The free market dollar has dropped to ARS 1,380 for sale, its lowest price in a month.
www.infobae.com
Los 3 factores que empujan a la baja del dólar libre y las cotizaciones financieras
Desde que el Gobierno anunció el esquema de “emisión cero”, que incluye la venta de divisas en el mercado de “contado con liqui”, el dólar libre cayó 8% y los bursátiles, un 11%
www.infobae.com
Digital Nomad
Well-known member
Yeah what a bummer. I was getting used to the higher exchange rates but sucks to see Blue dollar and MEP going back down again. I guess I should have exchanged more at 1500 to $1 USD. Hindsight is 20/20.The free market dollar has dropped to ARS 1,380 for sale, its lowest price in a month.
Los 3 factores que empujan a la baja del dólar libre y las cotizaciones financieras
Desde que el Gobierno anunció el esquema de “emisión cero”, que incluye la venta de divisas en el mercado de “contado con liqui”, el dólar libre cayó 8% y los bursátiles, un 11%
Uncle Wong
Well-known member
I guess maybe some of these measures they were taking are working drying up the market.
Digital Nomad
Well-known member
Yep. It seems like the pesos are drying up.
Getting more expensive again with the blue dollar so weak. It has fallen today again.
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