Argentines seek financial refuge in art
Picasso famously had his blue period. Argentina has its blue dollar – as the black market exchange rate is known. And that’s good news for art collectors and visitors to the ArteBA art fair which kicks off this week.
Managing Argentina’s de facto multiple exchange rates is itself a fine art. But now art itself, among other things, has suddenly become cheap – provided people don’t use the official rate. Continue reading »
“I want to go now”: Argentina’s inflation response
What’s that phrase? If you’re in a hole, stop digging?
Hernán Lorenzino, Argentina’s economy minister (left), abruptly terminated an interview with a Greek television journalist, Eleni Varvitsioti, after she pressed him on the tricksy issue of inflation in Argentina. Continue reading »
Bitcoins gain traction in Argentina
Argentines would love to save in dollars rather than a peso ravaged by inflation and whose value is on the skids, but the government won’t let them.
Demand for gold – another traditional safe haven – has surged. Banco de la Ciudad, the only bank to sell to individuals, says it can hardly keep up.
So … Enter the bitcoin? The virtual currency is emerging as the latest inflation refuge – and Bloomberg reports that TradeHill, a US-based bitcoin exchange, is now planning to open an office in Argentina where demand is fastest in the region. Continue reading »
Argentina: pros & cons of ‘supercard’
Is “no gracias” to Visa and Mastercard on the cards in Argentina?
The possibility of supermarkets only accepting a new supermarket credit card (valid for use in all big chains, the thousands of Chinese-run neighbourhood stores, some electronic and white goods retailers and even petrol stations at YPF, the state oil company) sparked a slew of headlines over the weekend in Argentina.
The idea came up last Friday at a meeting with Guillermo Moreno , the internal trade minister. Continue reading »
Argentina’s farmers: underappreciated?
Argentina has an impressive ability, it seems, to bite the hand that feeds it: farming.
It’s an impression reinforced by Rabobank’s latest Argentine agribusiness outlook. Argentina’s farming sector, which makes up nearly 60 per cent of total exports ($47bn in 2012, and that was a bad year because of drought), is a key economic breadwinner, bringing home the dollars that are essential to an economically choppy country still with debt in default and cut off from international capital markets. Continue reading »
Argentina’s Canute-like stand against inflation
King Canute commanding the waves to go back to Bosham
Inflation-hit Argentina has just agreed a new round of price freezes with major supermarkets, neighbourhood stores and white goods retailers until April 1.
Fine… except that even Cristina Fernández, the president, is sceptical that such accords actually work and even some of the participants see it as a futile, Canute-like exercise. Continue reading »
Argentina: double vision
The gap between how the outside world, and how the government, see Argentina, appears to be growing.
This week, Moody’s Investors Service downgraded its outlook for Argentina’s B3-rated peso and foreign-currency government debt from stable to negative, suggesting a full-blown downgrade may not be far away. The government couldn’t agree less. Continue reading »
Argentina: child benefit hike underscores inflation woes
The head of Argentina’s government in the lower house of Congress last month made a telling remark. Julián Domínguez said Cristina Fernández, the president, “is the first to recognise the reality on the street”.
Well that must explain why she has hiked child benefit by 26 per cent then. Apparently it means that government itself now believes that inflation – which the state statistics office says is running at 10 per cent and which the government is budgeting at 8.9 per cent for 2013 – is higher even than the opposition says. Continue reading »
Argentina: when a raise is not a raise
Now that’s a nice raise! Or wait, maybe it’s just the rate of inflation.
On Tuesday evening, Argentine President Cristina Fernández de Kirchner announced that the country’s unions and business associations had agreed on a 25 per cent increase in the minimum wage, to be delivered in two parts. The monthly wage would rise from the current 2,300 pesos (about $494) to 2,670 pesos September 1 and then to 2,875 pesos in February. Continue reading »
Argentina inflation: shoot the messenger
See no evil, hear no evil, speak no evil.
That, apparently, is the mantra of the Argentine government when it comes to inflation. And woe to those who contradict it. Just ask the folks at Consumidores Libres, a non-profit that tracks prices and represents consumers in consumer protection lawsuits. Continue reading »
Argentina: inflation-linked peso bonds take a dive
Argentina’s clampdown on foreign currency purchases has claimed another victim: peso-denominated bonds. Argentina’s inflation-linked peso bonds have lost an average of 15 per cent so far this year, reports Bloomberg, quoting data compiled by Barclays.
On the surface, the bonds certainly look attractive. The inflation-linked Argentine bonds due in 2033 yield 14.3 per cent plus the official annual inflation rate, according to Bloomberg. But that plus is the problem. The annual inflation rate as reported by INDEC, the national statistics agency, sits at 9.9 per cent. But many private economists say that INDEC has woefully underreported inflation since the Argentine government intervened in INDEC in 2007, and that the current annual rate is closer to 25 per cent. Continue reading »
Can an Evita banknote get Argentines to love their pesos again?
Like a naughty dog, the illegal foreign exchange rate in Argentina has refused to come to heel, despite the harsh words of its would-be trainer.
Guillermo Moreno, the interior trade secretary, met exchange traders on Friday and told them bluntly he wanted the “parallel” dollar rate, which has opened up a wide gulf with the official exchange rate, to fall, pronto. Aníbal Fernández, a government senator, announced this weekend that the dollar would cost between 5 and 5.1 pesos from Monday, down from around 5.9 last week. Continue reading »
Argentina’s parallel worlds
“Chileans love to visit Buenos Aires,” an ambassador to Santiago once told beyondbrics as he waited to board his aeroplane home from Argentina. “They call it the parallel universe.”
Never has the nickname seemed more apt than now. Argentines are glued to the progress of the “parallel dollar” – the black-market rate for the greenback, which opened up a gap of nearly 40 per cent with the official rate this week amid a government clampdown on dollar sale designed to husband the country’s hard currency stores. Continue reading »
Argentina: teachers strike back
The school year officially starts on Tuesday in Argentina, but for many children there will be no change to their relaxed summer holiday routine of getting up late and lazing around or playing video games.
Why? Because in six of the country’s 23 provinces, as well as in the federal capital, teachers are striking over pay having failed to reach a deal in collective bargaining. Continue reading »
Argentina: be productive, earn more!
Pay rises in an era of austerity – it sounds like an oxymoron, or a triumph of hope over experience.
But as Argentina’s annual wage bargaining season prepares to kick off this month, Cristina Fernández, the president, has come up with a potentially novel approach that other countries might like to consider: tie wage rises to productivity. Continue reading »
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