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Banking What is going on with the Blue dollar? Why is it going down?
- Thread starter James Bond
- Start date
According to experts, since last July and for the coming months, inflation is expected to be just below 4% per month. This indicates that a certain floor has been reached, with an estimated monthly inflation rate of 3.9% for July.
Regarding the official dollar exchange rate, they forecast a nominal rate of $1,088.2 per dollar. They don’t always get it right, and here things change constantly. We’ll see what happens.
Regarding the official dollar exchange rate, they forecast a nominal rate of $1,088.2 per dollar. They don’t always get it right, and here things change constantly. We’ll see what happens.
Blockchain
Well-known member
I don't think anyone really knows for sure what will happen. The fact that it is jumping around so much shows that. Also, the rate probably depends on how much intervention is going on. Is the government still manipulating the rate? I read that they can't build up their reserves now. Sounds like some progress made but also seems to be a case of one step forward, one step backwards too.
I would have to believe eventually the blue dollar will get stronger again. But there is so much intervention I can't tell what it will do in the short term.
Debt, transfer, cepo: government faces AR$34 trillion in maturities in 2024 - Buenos Aires Herald
With the equivalent of 5% of GDP maturing by December, analysts warn that the situation still hinges on currency controls
buenosairesherald.com
I thought we would see another devaluation but Milei says it won't happen. It is difficult to know for sure what will happen as the government is manipulating the currency so much.
Milei says he won't devalue, downplays importance of currency controls - Buenos Aires Herald
Speaking at the Council of Americas, the Argentine president claimed that saying that GDP can’t grow under the ‘cepo’ is a ‘falacy'
buenosairesherald.com
Avocado
Well-known member
What funny is that these kind of people criticized CFK and Massa for measures to control exchange rate and now they do the same thing. Let see if this time turn out different.I thought we would see another devaluation but Milei says it won't happen. It is difficult to know for sure what will happen as the government is manipulating the currency so much.
Milei says he won't devalue, downplays importance of currency controls - Buenos Aires Herald
Speaking at the Council of Americas, the Argentine president claimed that saying that GDP can’t grow under the ‘cepo’ is a ‘falacy'buenosairesherald.com
Milei is not to blame since he didn't implement the 'Cepo Cambiario'.I thought we would see another devaluation but Milei says it won't happen. It is difficult to know for sure what will happen as the government is manipulating the currency so much.
Milei says he won't devalue, downplays importance of currency controls - Buenos Aires Herald
Speaking at the Council of Americas, the Argentine president claimed that saying that GDP can’t grow under the ‘cepo’ is a ‘falacy'buenosairesherald.com
Exactly. He is trying to fix this trainwreck that he inherited. Laughable for others to criticize with no plan of their own. All things considered, things are going fairly well.
Avocado
Well-known member
Milei should just stop trying to talk about dollarization. It's not going to happen. I wish he would get realistic. At least now he is getting away from total dollarization as he knows that is impossible.
en.mercopress.com
Milei outlines his dollarization plan which will add other currencies
During his appearance at the Expo Real Estate event, Argentine President Javier Milei explained Thursday his currency competition plan and also delved into the matter of closing down the Central Bank, one of his main campaign promises. The head of state also stressed that thanks to the economic...
The parallel exchange rate traded at $1,315, a level we hadn’t seen since mid-June; it’s now the lowest it’s been in months.
www.lanacion.com.ar
Dólar hoy: el blue y el riesgo país tocaron el valor más bajo en dos meses
El tipo de cambio paralelo cotizó a $1315, una cifra que no se observaba desde mediados de junio; el índice elaborado por JP Morgan también llegó al mínimo en meses
www.lanacion.com.ar
Digital Nomad
Well-known member
What I wonder is what would the exchange rate be if they just let it float freely without manipulating it? It's only this low because of all the efforts by the government but what happens if the government doesn't do all of these measures? My girlfriend's father who is in business and finance here told me it should be over 2,000 to $1.The parallel exchange rate traded at $1,315, a level we hadn’t seen since mid-June; it’s now the lowest it’s been in months.
Dólar hoy: el blue y el riesgo país tocaron el valor más bajo en dos meses
El tipo de cambio paralelo cotizó a $1315, una cifra que no se observaba desde mediados de junio; el índice elaborado por JP Morgan también llegó al mínimo en meses
Interesting, what does he base that on? My favorite "Big Mac Index" is always fun to compare currencies, says the peso is 15% overvalued: https://www.economist.com/big-mac-index
Digital Nomad
Well-known member
I'm a novice here @CraigM and still learning the ropes. My girlfriend's family voted for Milei but they don't agree with everything that he is doing. I will have to go more in detail with him but it seems like many of the wealthy here have their savings in dollars. And even middle class people that I have met have been saving in dollars vs. pesos.
Many items here are more expensive vs. the States or Europe. And traveling outside of Argentina can be cheaper than staying in Argentina. Of course a big part of this is import taxes and it sounds like the government is getting rid of several of the import taxes so hopefully that helps.
It sounds like everyone wants the currency controls to end as quick as possible but it doesn't sound like that will happen any time soon. I don't know enough about current local conditions but I have always believed in a currency just floating freely. As I understand it, many were against Peronists messing around with the currency but it seems like that is what this government is also doing.
I've asked a few people what the exchange rate would be for the blue dollar if the government wasn't interfering at all with it and no one can answer that.
Uncle Wong
Well-known member
I've read many articles that say that the peso is overvalued.
Even members of President Milei's economic committee seemed like they disagree with some things. Things are complex in Argentina but several people have also said that peso is overvalued.
El Gobierno echó a Teddy Karagozian, el asesor económico de Javier Milei que había cuestionado a Luis Caputo
Respondía a Demian Reidel, quien tomó la decisión, según anunció el vocero presidencial, Manuel Adorni.Días atrás había dado un paso al costado Fausto Spotorno, quien también había manifestado críticas al Gobierno.
www.clarin.com
I've also read many times that the peso is overvalued. I read about Argentina selling USD reserves to shore up the peso. I am also curious what would happen to the exchange rate if the government didn't do this.
batimes.com.ar
Argentina to sell dollars in parallel FX market to shore up peso
Central Bank will sell US dollars in the country’s parallel foreign exchange markets starting Monday, says Economy Minister Luis Caputo.
batimes.com.ar
I hear you, macroeconomic predictions are most often wrong and nobody really knows. It's just fun to speculate and I'm no exception here!
Honestly it seems like no one really can predict accurately macroeconomic situation there. I agree with you it's fun to speculate how things will turn out. The more I read the more I get confused on what might happen.
Milei's Bold Zero Emission Gamble Amid Argentina's Economic Challenges
President Javier Milei's plan to eliminate monetary emissions aims to curb Argentina's inflation and stabilize the exchange rate. This ambitious move faces challenges from low central bank reserves and a slowly recovering economy.
latinamericanpost.com
Argentina's situation must be very interesting for economists. It seems like so far the President's team is doing a good job but it's interesting that Caputo was in charge before when things didn't go so well. My friends in Argentina at least are hopeful that things will turn around. It's been a long time since any of them had hope. I think that is probably what the Milei brings to the table.
Personally I don't understand how so many of the poorer classes supported Milei knowing full well they would bear the brunt of the increases. I read another thread today that said bus costs have gone up 600% since Milei took over. I'm not sure if that is true or not but that is a staggering figure! To be fair, the President said ahead of time he was going to do all of these things.
I wonder how much rope people will give him. It sounds like more increases with utility rates and transportation costs are going to keep going up.
Betsy Ross
Well-known member
Exactly correct. It's almost impossible for anyone to really accurately predict what will happen with exchange rate. There are so many wildcard factors here. If someone tells you they know what will happen with the economy, exchange rate, etc. they are lying.
Even some professional economists here will be honest and tell you they don't know what will happen next year.
Vince
Well-known member
Agree. I feel more confident than ever that things will improve here for the masses. The reason why many are willing to suffer is because they feel like for the first time a President isn't lying to them and telling it like it is. I do believe they should slow down the increases with transportation and utility increases. Transportation is one area that many countries won't ever be profitable on.
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