CEPO is lifted

[antipodean]

Will Argentine business owners lower their margins before the place implodes though?
I very much doubt that it’s within the Argentine psyche to do so…

When hell freezes over. Argentine business owners know the reality of Argentina - what’s here today is gone tomorrow. Unless/ until the country enjoys 3 or more successive political terms with a good degree of stability throughout, for many of them the trust in the country and society itself just won’t be there to take the risk.

This is a good part of the reason why I have been saying for years that Argentine is an inherently expensive country the minute FX distortions disappear - that thing called the official dollar that expats never used to give a second thought about (but for Argentine businesses and wage earners it was key to understanding the proportionality of income vs costs…) was a pretty good indicator of where prices would land.

I was expecting a quick rise to 1400, can anybody ELI5 why the peso seems to have strengthened 10-15%? Is it the IMF loan?

Expecting, or hoping for?

 

[LuckyLuke]

I was expecting a quick rise to 1400, can anybody ELI5 why the peso seems to have strengthened 10-15%? Is it the IMF loan?

The factors involved are complicated. Everyone is in a wait and see position. I saw on the news yesterday that cuevas were not selling dollars at any of the published prices, only buying dollars. Once the dynamics of import/export, agricultural liquidations, and both local and central bank movements can be assessed we'll see a general trend begin to form.

I can tell you one thing, if the peso does go down to 1,000 it would be a tremendous opportunity to buy dollars cheap. One of the reasons why it's important for expats to have some peso denominated income stream to take advantage of these swings.

 

[Che1990]

One of the reasons why it's important for expats to have some peso denominated income stream to take advantage of these swings.

I am now seriously considering it for the first time since 2018.

 

[MilHojas]

First week without the cepo: dollar rises and falls, impact on prices remains unclear

The first week without Argentina’s longstanding foreign currency restrictions, commonly known in the country as the cepo, has passed without a major economic crisis. However, economic analysts told the Herald that questions remain about the sustainability of the new scheme.

 

[Rich One]

Wow Big news supermarkets rejected new price lists with a 9 % an 12 % increases . Four monopolistic suppliers control the offer Molinos, Unilever and a few others.

BUT Supermarkets supply only 30% of the CABA market needs, the balance 70% is sold via chinos or mom and pop stores. Well chinos raise prices a piacere, eggs in my chino went up 10% , as well as other products.

 

[chris]

What rate is applied to foreign credit cards?

 

[Rich One]

What rate is applied to foreign credit cards?

At my Chino she applies 10 % surcharge on credit cards.

 

[Che1990]

I suspect they are making the dollar go down to 1000 so their buddies can take advantage of the carry trade. Now, individual international investors can access the market and take their money out after 6 months, so all the Hayden Davies will buy in and slowly we’ll see the pesos devalue over 6 months and then they all cash out.