Caputo creating a tax haven for dollars "from wherever"

[FrankPintor]

Some background on the currency manipulations:

Por qué el dólar cayó casi un 5% en una sola jornada y cuánto costará en diciembre según el mercado

La baja del tipo de cambio oficial impactó sobre todas las demás. El dólar blue cayó $20 y cerró a $1.170

www-infobae-com.translate.goog

"Although the BCRA is not directly intervening in the spot market within the bands, it is doing so heavily in the futures market. Today (yesterday) the intervention was particularly aggressive, with estimates ranging between $500 and $800 million, something unseen in years. This caused a 130-peso drop in the dollar in December, which in turn, through arbitrage, impacted the spot market , which ended down 70 pesos compared to the previous day," explained financial analyst Cristian Gardel , president of Gardel Trading.

Another key factor is the shortage of pesos in the financial market. When the Central Bank intervened in the market by purchasing dollars , this provided a significant injection of pesos. Now, without official participation, those pesos are conspicuously absent, while dollars are abundant during the period of peak export liquidation. This is another reason driving the dollar down.

 

[Redpossum]

Blue dollar is a yo-yo today. First it dropped 5 pesos to 1165, then it went up 10 pesos to 1175. God only knows what will happen the rest of the afternoon.

Frank has done a good job of explaining some of what's pushing it down, but obviously there's something pushing it back up, at least a little.

 

[Redpossum]

Aaaand back down again to 1165

 

[FrankPintor]

Blue dollar is a yo-yo today. First it dropped 5 pesos to 1165, then it went up 10 pesos to 1175. God only knows what will happen the rest of the afternoon.

Frank has done a good job of explaining some of what's pushing it down, but obviously there's something pushing it back up, at least a little.

The market thinks the Dollar should go up, and BCRA interventions (quite substantial, according to the article I shared) make it go down?

Milei frittering away the IMF loan, inviting currency speculation attacks in due course, after which we will be left with nothing?

 

[dlish]

"Although the BCRA is not directly intervening in the spot market within the bands, it is doing so heavily in the futures market. Today (yesterday) the intervention was particularly aggressive, with estimates ranging between $500 and $800 million

Does this mean in simple English that they literally blew $800 million yesterday manipulating the futures market, or something else?

 

[LuckyLuke]

Does this mean in simple English that they literally blew $800 million yesterday manipulating the futures market, or something else?

Blown is a not quite correct, it believe it was paid to market participants in the form of put options shorting the peso value and call options buying the dollar. Where it gets really fun is that profit takers can continue reinvesting their gains into more options forcing even higher intervention. It reminds of Soros vs the Bank of England, which had it's own little interesting peg back in the day...


"The ERM fixed the exchange rates of the participating currencies to the German mark, which was the strongest and most stable currency in Europe at the time. The ERM allowed for some fluctuations within a certain range, but if a currency reached its upper or lower limit, the central bank of that country had to intervene in the market to keep it within the band."

How Did George Soros Break the Bank of England?

George Soros pocketed $1 billion by betting against the British pound in 1992, cementing his reputation as the premier currency speculator in the world.

www.investopedia.com