The exchange market in Argentina has opened with ups and downs this Monday after the victory of Peronism in the first round of the general elections on Sunday. The different exchange rates that coexist in the South American country, more than a dozen, have registered different variations in the first operations. While the official dollar remains at 365 pesos, a value that has been maintained since the Government devalued the national currency in August, in the parallel market the so-called dollar blue It is trading after noon at 1,100 pesos, 200 more than at the beginning of the day. Other types, such as the MEP dollar or the CCL dollar, used in financial operations, have been equated to around 900 pesos per US unit.
Argentines were waiting for the market’s reaction this Monday after the victory of the current Minister of Economy, Sergio Massa, in the first round of the elections. Massa won this Sunday with 36.68% of the votes ahead of Javier Milei, leader of the far-right party La Libertad Avanza, who obtained the support of 29.98% of the electorate. Both will meet in a second round on November 19, and until then the scenario remains uncertain.
The value of the dozen quotes that coexist in Argentina so that savers, tourists, exporters or stock market operators can use currencies have had different variations. This Monday, the value of the official dollar remains stable in Argentina. The price of the informal dollar or blue that is sold on the street is one of the prices that Argentines are most attentive to and has had a significant increase this Monday: after noon it sells for about 1,100 pesos while in the morning it did so at 900. Financial dollars , the MEP and the CCL (counted with settlement), have been equal to around 900 pesos.
Elisabet Bacigalupo, chief economist of the consulting firm ABECEB, believes that the climate is “calm like Argentina.” “There is a little more short-term tranquility in a context in which uncertainty will continue to be high because the last word has not been said,” explains the economist, adding that a lower demand for foreign currency is perceived in the market. “Argentina has had excess volatility the previous week. We were seeing a sharp drop in demand for pesos and this process is going to stop now,” she explains. Salvador Vitelli, from the Romano Group consulting firm, adds: “The market goes from setting prices in the scenario of a possible disorderly dollarization to one of devaluation that may not be so abrupt.” The economist predicts that this month will be “full of uncertainty” and that “each move” will be “more than crucial for political purposes.”
The victory of the ruling party’s candidate has not caused the shock that Milei’s surprise victory caused in the August 13 primaries. That financial black Monday, the Government devalued the peso by 18.3% to 365 units per dollar, the value that remains until today. The collapse was repeated in other quotes, including in the parallel market, not regulated by the State, which validated an exchange rate close to 685 pesos per US dollar at that time.
Massa, as Minister of Economy, promised to maintain the official wholesale exchange rate until November 15 and then apply a 3% monthly depreciation. Argentina is negotiating the refinancing of the $44 billion debt that the Government of Mauricio Macri contracted with the International Monetary Fund in 2018. The devaluation after the primaries, the Government argued, was part of the agreement closed at the end of July. The economy has been one of the axes of the electoral campaign in a country where inflation reached 138.3% year-on-year in September; Poverty exceeds 40% and the Central Bank’s reserves are in the red.
The candidates propose different recipes to get out of the crisis. While Massa, who today is in charge of managing the country’s economy, proposes more state spending and relying on national industry, the ultra-liberal defends reducing the State to a minimum and dollarizing the economy because the peso, he has said, is worth “excrement.” ”. The economist called ten days before the elections not to save in pesos and hours later the dollar exceeded 1,000 pesos per unit, a record value that increased exchange tension. The Government then intensified operations to confiscate foreign currency from the illegal market. “The higher the price of the dollar, the easier it is to dollarize,” Milei said in an interview. In a month, Argentines will return to the polls to choose between the two.
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