Buying dollars legally gets even harder now

[allcraz]

http://ennotas.com/afip/17143-la-afip-rechazo-la-mayoria-de-las-solicitudes-de-compra-de-dolares/ 95% rejected TODAY at a casa de cambio, although I don't know anything about this news source.

 

[KatharineAnn]

It would appear that I chose the wrong time to leave Argentina with my job where I earn dollars...I could've started getting some killer exchange rates... Not that that would be of any help to me, that with inflation being what it is...

 

[El chabon]

Let's say you predict as a government your dollar supply could soon run out.

What do you do:

1: Keep things how things are with people mainly spending the pesos they are earning
2: Limit the amount of dollars you can withdraw/change

If you go for number 1 you basically maintain the same situation
If you go for number 2 people will hold onto there dollars and will find any possible way of taking out dollars and stash them somewhere(familymembers with no saving posibility also taking out dollars, etc

I can only see this go wrong and backfire

 

[sesamosinsal]

It's a vicious circle. If everyone in the country converted their pesos to dollars, there would be a ton of pesos sitting on the BCRA's balance sheet and no one holding them. In one way, the Argentines are shooting themselves in the foot when they do this. When you buy a foreign currency, you devalue the one you sold.

The government knows the economy is slowing down. The real is devaluing, which means Argentine exports to Brazil are going to be more expensive (less competitive); the mess in Europe is looking like it's going to get worse before it gets better; the U.S. isn't in incredible shape; China is slowing down; and Argentina has no access to credit. Thus, without exports, this country has no dollars. Without dollars, Argentina can't import products that it needs -- like the $12 billion USD that it's going to need to import for fuel this year, unless the nationalization of YPF churns out some miracle.

There have been mistakes in the management of the economy, but what's done is done. They're now going to use those reserves to keep the country afloat. It's risky, but they don't have much of choice.

 

[El chabon]

It's a vicious circle. If everyone in the country converted their pesos to dollars, there would be a ton of pesos sitting on the BCRA's balance sheet and no one holding them. In one way, the Argentines are shooting themselves in the foot when they do this. When you buy a foreign currency, you devalue the one you sold.

The government knows the economy is slowing down. The real is devaluing, which means Argentine exports to Brazil are going to be more expensive (less competitive); the mess in Europe is looking like it's going to get worse before it gets better; the U.S. isn't in incredible shape; China is slowing down; and Argentina has no access to credit. Thus, without exports, this country has no dollars. Without dollars, Argentina can't import products that it needs -- like the $12 billion USD that it's going to need to import for fuel this year, unless the nationalization of YPF churns out some miracle.

There have been mistakes in the management of the economy, but what's done is done. They're now going to use those reserves to keep the country afloat. It's risky, but they don't have much of choice.

That already changed when they started to use the BCRA reserves for debt payments but still if you have limited dollars available it doesn't make sense to limit availability because it will only mean you will get more people wanting to buy dollars and/or stocking up on dollars.

I wonder how long it is going to take untill locals are expats who are doing a visa run to Colonia to bring over some money for them, it seems to be it's cheaper and less risky then using a cueva transfering your money to Uruguay. I for one would get various expats to bring money over if I was in need of getting my dollars into Uuguay.

Any educated Argentine with limited saving-posibilities should cut back on spending and stocking up on dollars as much as you can because I dont think there are many Argentines now who think there jobs are secure

 

[sesamosinsal]

That already changed when they started to use the BCRA reserves for debt payments but still if you have limited dollars available it doesn't make sense to limit availability because it will only mean you will get more people wanting to buy dollars and/or stocking up on dollars.

You are correct that they started using the reserves in 2010 after they showed Martin Redrado the door. What changed this year (la reforma de la carta orgánica del BCRA), however, is that the amount of pesos in public circulation wouldn't have to be guaranteed by the dollar reserves. That number (includes public circulation, financial entities, and checks) sat at $171 billion ARS as of April, up from $130 billion ARS in April of 2012. Thus, the BCRA would have to maintain ~$38 billion USD in its reserves to guarantee the pesos in circulation. Not anymore, though.

Check out the chart attached. If you look at the fat navy blue line, you'll see a sort of lull from January until April of this year. From April 2011 to December 2011, the circulation of pesos expanded, yet since then it has come to a standstill. It could be for several reasons (less demand), but more than likely the Central Bank probably couldn't legally expand further. The reserves oscillated from ~$45 billion USD to $48 billion from December 2011 to April 2012, compared to around ~$38 billion USD (in ARS) in circulation. That would leave them with only $7-10 billion USD.

Report: http://www.bcra.gov.ar/pdfs/polmon/infomondiae.pdf

 

[sesamosinsal]

sat at $171 billion ARS as of April 2012, up from $130 billion ARS in April of 2011.*

 

[El chabon]

You are correct that they started using the reserves in 2010 after they showed Martin Redrado the door. What changed this year (la reforma de la carta orgánica del BCRA), however, is that the amount of pesos in public circulation wouldn't have to be guaranteed by the dollar reserves. That number (includes public circulation, financial entities, and checks) sat at $171 billion ARS as of April, up from $130 billion ARS in April of 2012. Thus, the BCRA would have to maintain ~$38 billion USD in its reserves to guarantee the pesos in circulation. Not anymore, though.

Check out the chart attached. If you look at the fat navy blue line, you'll see a sort of lull from January until April of this year. From April 2011 to December 2011, the circulation of pesos expanded, yet since then it has come to a standstill. It could be for several reasons (less demand), but more than likely the Central Bank probably couldn't legally expand further. The reserves oscillated from ~$45 billion USD to $48 billion from December 2011 to April 2012, compared to around ~$38 billion USD (in ARS) in circulation. That would leave them with only $7-10 billion USD.

Report: http://www.bcra.gov.ar/pdfs/polmon/infomondiae.pdf

7 to 10 billion are also the estimates the BCRA/Argentine state has available for 'free' spending, if you follow by current trends somewhere in the middle of 2013 Argentina will run out of money. If the economy tanks prolly a bit earlier

 

[Ashley]

So what are expats doing (the ones that earn in pesos)? Are you exchanging your pesos for dollars on the black market? Are you just spending them? Are you sitting tight and waiting to see what happens?
My husband was told by the afip today that he doesn't earn enough to exchange his money for dollars (and he earns a pretty good Argentine salary). Last month, he was able to exchange money without any problems.
We don't have a tremendous amount left over at the end of the month, but I would still like to be able to keep it in foreign currency. I'm just wondering if its worth my while exchanging en negro (this worries me because of the possiblity of getting counterfeit notes), or just sitting on the pesos or buying something that is unlikely to lose value (jewellery, etc)...What's everyone else doing??

 

[El chabon]

So what are expats doing (the ones that earn in pesos)? Are you exchanging your pesos for dollars on the black market? Are you just spending them? Are you sitting tight and waiting to see what happens?
My husband was told by the afip today that he doesn't earn enough to exchange his money for dollars (and he earns a pretty good Argentine salary). Last month, he was able to exchange money without any problems.
We don't have a tremendous amount left over at the end of the month, but I would still like to be able to keep it in foreign currency. I'm just wondering if its worth my while exchanging en negro (this worries me because of the possiblity of getting counterfeit notes), or just sitting on the pesos or buying something that is unlikely to lose value (jewellery, etc)...What's everyone else doing??

Every situation is different, I dont earn pesos so I am not affected but what I would do is, save up whatever you can, stash it somewhere and if people come to visit you ask them to bring dollars and change as much as they are needing in pesos.

Maybe also give them your saved up dollars to deposit them in your account at home.