CEPO is lifted

[desde_Holanda]

This is what I expect.

Going straight to 1400 and staying there until they run out of funds to support it?

I am thinking things might work out differently. As I understood the IMF has demanded a positive interest rate. This would mean a much better deposit return on pesos than on dollars. Given the relative security of the peso in the coming months (the central bank has enough ammunition to defend the upper limit of the bandwidth, so the market peso will only weaken 1% above 1400 after one month and so on), this could mean that the carry trade becomes interesting again.

Suppose that the peso will trade 1400 on Monday. Then people will want to sell dollars and put it in pesos for 1 month, 2 months. Depending on the numbers involved this might even move the peso down a little, till carry trade will stop. It might then reach the upper limit again, and people start selling dollars again. It might even mean that the central bank doesn't need to sell dollars themselves, so they keep their reserves intact. I know, it all depends on the amounts involved and also on bid-offer spreads, but nevertheless....

 

[Jimbob]

So say the peso does shoot up 20%, does this mean that the vendors will increase prices by that? Which in turn everything becomes 20% more expensive in dollars because we have been enjoying the blue rate all this time?

 

[antipodean]

I am thinking things might work out differently. As I understood the IMF has demanded a positive interest rate. This would mean a much better deposit return on pesos than on dollars. Given the relative security of the peso in the coming months (the central bank has enough ammunition to defend the upper limit of the bandwidth, so the market peso will only weaken 1% above 1400 after one month and so on), this could mean that the carry trade becomes interesting again.

Suppose that the peso will trade 1400 on Monday. Then people will want to sell dollars and put it in pesos for 1 month, 2 months. Depending on the numbers involved this might even move the peso down a little, till carry trade will stop. It might then reach the upper limit again, and people start selling dollars again. It might even mean that the central bank doesn't need to sell dollars themselves, so they keep their reserves intact. I know, it all depends on the amounts involved and also on bid-offer spreads, but nevertheless....

I tend to agree. On the whole, there is need and an incentive for both natural persons and businesses to have both pesos and dollars… after all there is the age-old logic that in order to make money one first needs to spend money, so I wouldn’t expect a run on the banks just yet even if some profits start moving abroad to their owners, costs for everyone involved remain local. (And businesses aren’t yet exactly lining up to dolarize their employees and domestic suppliers - nor are expats lining up to dolarize their domestic help or costs of living - while there is still a potential benefit to be made).

The problem / déjà-vu I see however is a cultural one of pent up demand and deep distrust of the political establishment meaning the out flows could be “illogical” and thus difficult to foresee as people and businesses seek to protect their wealth while the doors are open.

 

[D.B. Cooper]

So no street vendors on Calle Florida, no casas de cambio?

I was thinking the same thing,…no more Cuevas?.. I went to one last Friday and exchanged U$D 100 and got $131.000.

 

[Caribbean Cool]

Does anyone know what the dollar sell number is this morning? What do I get for selling dollars....and where? Bank or street?

 

[Caribbean Cool]

W.U. is 1335

 

[lunar]

I see USDT is down 4.5% in pesos this morning. Is this the new unified exchange rate?

 

[lunar]

I was thinking the same thing,…no more Cuevas?.. I went to one last Friday and exchanged U$D 100 and got $131.000.

Well, there are still people getting paid "en negro" who want to buy dollars.
So the cuevas will still be around, I guess, just like during Macri’s time.

 

[MilHojas]

El dólar salta a $1.190 en el Banco Nación en la primera rueda después del acuerdo con el FMI

Tras el anuncio del ministro Luis Caputo de una flotación entre bandas de $1.000 y $1.400. En la primera sesión tras los anuncios, el dólar oficial saltó 8,4% en comparación con la cotización del viernes.

www-ambito-com.translate.goog

The dollar jumps to $1.190 at Banco Nación in the first trading session after the agreement with the IMF.

Original article in Spanish

 

[Che1990]

I see USDT is down 4.5% in pesos this morning. Is this the new unified exchange rate?

View attachment 10306

In theory yes, as now there all individuals can buy USD freely, so these rates will be the same. So if in theory yes banks it’s 1250, as opened this morning, then dólar crypto would follow suit.

It will be volatile this week for sure