In the last 20 days, the so-called ‘dollar blue’ (parallel) jumped 15 pesos.
The Argentine currency sank this Wednesday in the parallel market where the dollar reached the record price of 199 pesos, while in the official market the exchange rate was 105.38 pesos per greenback, amid restrictions on the purchase of foreign currency .
In the last 20 days, the so-called ‘blue dollar’ (parallel) jumped 15 pesos, increasing the gap with the official exchange rate to 99.2%, which puts pressure on inflation.
Since 2019, an exchange control has been in force, in a context of currency shortage and with the country without access to international credit markets.
Faced with the reopening of borders to foreign tourism this week, after 19 months of closure due to the covid-19 pandemic, the Central Bank decided to allow tourists to legally change up to $ 500 by opening an account and with the quotation of the MEP or ‘stock dollar’, as the exchange rate that results from buying government bonds is called and that this Wednesday was 181.32 pesos, much more favorable than in the official market.
The informal market, where the ‘blue’ dollar is traded, has a low volume of operations but functions as a sensitive indicator of expectations, ten days after crucial mid-term legislative elections.
Argentina will hold legislative elections on November 14, in which half of the Chamber of Deputies and a third of the Senate will be renewed.
Analysts speculate on the possibility of a devaluation after those elections, a hypothesis rejected by the Minister of Economy, Martín Guzmán.
The center-left government of Alberto Fernández launched measures these weeks with which it seeks to reverse in this instance the electoral setback it suffered in the September primaries, but so far the polls are not favorable.
In the elections, the government risks losing the majority in the Senate and finds difficult its aspiration to achieve its own quorum in the lower house.
A devaluation of the currency would mean a new blow to the already very depressed pockets of the Argentines. According to the latest Central Bank survey, the main consulting firms estimate that inflation will reach 48.2% in 2021. (I)
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