Argentina: “Blue dollar” breaks 10 to 1 barrier
It’s been a tough 24 hours for the people who run the Argentine economy.
A day after President Cristina Fernández de Kirchner promised that there would be no devaluation of the peso under her administration, everything seemed to go sideways.
First, the black market dollar – known as the “blue” dollar – broke through the Messi barrier. Continue reading »
Argentina: “blue dollar” hits new high
Watching Argentina’s unofficial exchange rate is suddenly like being at an auction: on Wednesday it has risen breathlessly, hitting 8.75 pesos per dollar. Yesterday it was 8.27 pesos, Monday it was 8.08. And breaching the 8-peso barrier was a milestone in itself. What’s going on? Continue reading »
Argentines go for gold. Literally.
When it comes to saving options in Argentina, it’s not so much a case of “all that glisters is not gold” but, perhaps, “the only thing that glisters is gold”.
Let’s face it, saving is hard with galloping inflation and an outright government ban on buying dollars specifically to save. Buying dollars for any other purpose is hardly much easier, and who would want to save in pesos when their value is on the skids? 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: watch out for a devaluation
Wiping 20 per cent off the value of the Argentine currency this year “isn’t off the wall”. So says Guillermo Moreno, the internal trade secretary and one of the tough guys in the government of Cristina Fernández.
What is this – rare honesty from an administration that denies the country has a problem with inflation? Continue reading »
Argentina’s “blue” dollar blues
Argentines continue sprinting away from their peso as if it were slathered with avian flu virus. After hitting a record high yesterday, the black market (or “blue”) dollar in Argentina hit another high on Thursday, of 7.54 pesos to the dollar, the local daily La Nación reported. Continue reading »
Argentina: black market dollar hits new high
Here’s a timely reminder that Argentina’s problems go far beyond its legal wrangling with its “holdout” creditors.
Wednesday saw another day of intense trading in the unofficial dollar market as Argentines fled from the peso to the US dollar. The black market, or “blue” rate, hit a record high of 7.52 pesos per dollar. That is 52 per cent more than the government’s official rate of around 4.96 pesos per dollar. Continue reading »
Argentines head to Uruguay to bypass dollar restrictions
For Felipe, an Argentine freelancer who works in the media, opening a bank account recently meant catching the ferry across the River Plate to Uruguay.
“I’m losing 40 per cent of my salary just because of the exchange rate,” he says. “That could pay a month’s quota at my daughter’s school or a small mortgage.” Continue reading »
Argentina tightens grip on credit card purchases abroad
It was nice while it lasted.
Like a harried engineer using his fingers to patch a leaky dyke, on Thursday the Argentine government announced yet another currency restriction aimed at stopping the bleed of foreign currency from its central bank.
This time the target was overseas credit card purchases, which up until now were not limited. Continue reading »
Argentina: mutual funds get exchange squeeze
The Argentine government has come up with another rule designed to clamp down on dollar holdings: mutual funds are now being obliged to value their foreign investments at the official exchange rate.
Is this another example of Argentina shooting itself in the foot? Continue reading »
Argentina: seizing the currency printer
Another Argentine expropriation. Another which the government confidently expects “won’t cost the state a penny”.
After Cristina Fernández’s government took over energy company YPF in April (Congress approved the expropriation of 51 per cent of the company in early May), for reasons of national interest (and for which it hopes not to have to pay anything), now it is the turn of banknote-printing firm, Compañía de Valores Sudamericana (CVS). Continue reading »
Argentina’s futures markets: ‘de-dollarisation’ ahead?
In an interview with Radio Continental on Friday, Argentine central bank president Mercedes Marcó del Pont confirmed news reports that the government was considering means to stop guarantees in the country’s futures markets from being written in dollars or other foreign currencies. Continue reading »
Argentina: lots of Evitas needed
A lot of them. And quickly.
This issue hung over Argentine President Cristina Fernández de Kirchner’s triumphant Wednesday unveiling of a new design for the country’s 100 peso banknotes, featuring the profile of former First Lady and fictionalized Broadway mainstay Eva Perón, commonly known as Evita. 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 »
Argentina: it’s official, no more dollars!
The Argentine government formally announced on Thursday that its citizens will no longer be able to convert their savings from pesos to dollars, something many Argentines do to hedge against inflation and devaluation.
Driving the point home in an interview published Friday in the pro-government newspaper Pagina/12, Argentine central bank president Mercedes Marcó del Pont noted that the exchange restrictions also applied to real estate buyers purchasing dollar-denominated properties. “People doing these transactions will have to make the payments in pesos,” she said. Continue reading »
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