The Argentine Peso is going down, down

[4774Papa]

Here is an interesting article on the Argentine Peso.

 

 

http://www.cnbc.com/id/101360387

The peso-dollar interbank exchange rate hit the 8 mark, down 11 percent on the day following a 3 percent decline on Wednesday. Argentina's black market peso fell 7.25 percent on Thursday to close at 13.1 per dollar.

"Yesterday the central bank neither bought nor sold dollars, which tells you what its position is with respect to the exchange rate," cabinet chief Jorge Capitanich told reporters on Thursday.

Central bank reserves stood at $29.44 billion.

On Thursday the bank intervened but by an inconsequential $100 million, according to local foreign exchange traders.

(Read more: Goldman: Cut your emerging markets exposure by a third)

Due to local currency controls, the black market is the only way for many Argentines to get their hands on dollars as confidence in Latin America's No. 3 economy falls and inflation soars. Given the country's history of repeated financial crises, Argentines like to save in dollars.

 

 

 

 

Will Argentina ever restructure its debt?

 

In an exclusive interview, CNBC's David Faber sits down with Jay Newman, Elliott Management, and discusses why it's time the Latin American country talked to its creditors.

 

According to private analysts, consumer prices rose more than 25 percent in 2013, although discredited official data clocks inflation at less than half that.

Unorthodox policies, from currency controls meant to stop capital flight to heavy stimulus spending unencumbered by inflation targeting, have made Argentina a no-go zone for all but the most risk-hungry investors.

Argentina's key grains sector has cut exports as farmers hoard their crops rather then expose themselves to the swooning local currency. This has contributed to the scarcity of dollars that is debilitating the peso.

[pmacher61]

http://ambito.com/

Black market exchange rate of pesos for USD is dropping as govt control over USD purchases has been eliminated. Was 13. Now 10.

Edited January 25, 2014 by pmacher61

[4774Papa]

http://ambito.com/

Black market exchange rate of pesos for USD is dropping as govt control over USD purchases has been eliminated. Was 13. Now 10.

We hear from friends in Buenos Aires that there is chaos in the stores. Stores are now revising prices, up.

[LadyDivot]

Really? DH and I were just talking about whether stores/restaurants/cafes could adjust their pricing so quickly. However, it seems that the Arg peso is stabilizing.

 

Pam

[4774Papa]

Really? DH and I were just talking about whether stores/restaurants/cafes could adjust their pricing so quickly. However, it seems that the Arg peso is stabilizing.

 

Pam

Pam,

The Peso is bordering on hyperinflation, not Weimar Republic levels yet, but inflation in excess of 25% per year.