The country’s financial market reacts to the election results; In the campaign, Milei said he wanted to end the Argentine currency
The result of the Argentine elections caused a devaluation of the local currency, the Argentine peso, in the parallel exchange rate – which is not the official one. The blue dollar (also called the parallel dollar) went from 925 Argentine pesos on Friday (17.Nov.2023) to 1,026 pesos this Tuesday (21.Nov.2023), which corresponds to an increase of 10.91% .
Javier Milei, right-wing candidate elected on Sunday (19.Nov), said during the campaign that he intended to end the country’s currency and dollarize the economy, in addition to closing the Central Bank of Argentina.
Before the elections, R$1 was capable of buying 190 Argentine pesos at the parallel exchange rate. This Tuesday (Nov 21), it became worth 211 Argentine pesos. In other words, an increase of 10.8% of the real.
When considering the country’s official quote –controlled by the government and which goes against the idealization of a free and floating exchange rate–, one dollar is equivalent to 356 Argentine pesos, an increase of 0.63%. R$1 is equivalent to 73 Argentine pesos, an increase of 0.16%.
The Argentine government limits price increases as an economic policy. To protect themselves from this artificial measure of holding down prices, the country’s population uses the parallel dollar.
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