Does anyone else feel there might be a peso collapse this year?

[Redpossum]

It looks to me like this is just a preliminary fear jump with the impending IMF agreement terms.
I don't see how it won't bump up plenty more when the policy removals go into effect.

Does anyone else feel like there is a weird sense of deception around it though? I keep seeing articles with officials saying the changes to exchange rates won't have an impact on the people, and the IMF isn't asking for (official) devaluation.

I don't get how statements like that can be true if the exchange policies/cepo are changed. Feels like "remain calm and don't panic" style lies to keep the marked calm.

My guess is an eventual dam breaking after so much effort to keep the exchanges stable and suppressed.

I'm seeing it back down to 1285, where it started the day.

But I do believe Joddson is correct; once the actual run starts, there will be no stopping it.

 

[Quilombo]

I love that the IMF loan we're taking is going to be used to keep the peso artificially valued, it's the worst of both K and Mileista economic policy in one.

 

[ArgentinaVet]

Come on 5000! Let's go!

Be careful what you wish for. Keep in mind what makes Argentina cheap for holders of foreign currency is when there is an artificially low official FX rate that many/most goods base their prices on and an accessible parallel rate that is significantly higher than the official rate that does not directly move the prices of most goods. Having a unified rate that swiftly jumps to 2000 or 5000 will carry a significant pass though to prices (meaning it will not necessarily be cheap for holders of foreign currency for long) , borderline hyperinflation and generalized chaos/disorder in the streets.
Nevertheless, a big change is coming to the FX regime sometime in 2025 and it's going to be messy.

 

[Redpossum]

Be careful what you wish for. Keep in mind what makes Argentina cheap for holders of foreign currency is when there is an artificially low official FX rate that many/most goods base their prices on and an accessible parallel rate that is significantly higher than the official rate that does not directly move the prices of most goods. Having a unified rate that swiftly jumps to 2000 or 5000 will carry a significant pass though to prices (meaning it will not necessarily be cheap for holders of foreign currency for long) , borderline hyperinflation and generalized chaos/disorder in the streets.
Nevertheless, a big change is coming to the FX regime sometime in 2025 and it's going to be messy.

I wasn't seriously wishing for 5000.

With respect, I'm not sure I agree with your analysis.

First, we have seen many times that a jump in the blue dollar will cause increased prices even though the official dollar remains substantially unchanged.

Second, I doubt that we will ever see a unified rate.

But in any case, all we can do is wait and see. There's no telling what madness Milei will inflict on us before he suffers his De La Rua moment.

 

[ArgentinaVet]

I wasn't seriously wishing for 5000.

With respect, I'm not sure I agree with your analysis.

First, we have seen many times that a jump in the blue dollar will cause increased prices even though the official dollar remains substantially unchanged.

Second, I doubt that we will ever see a unified rate.

But in any case, all we can do is wait and see. There's no telling what madness Milei will inflict on us before he suffers his De La Rua moment.

A unified and free floating rate is coming (as seen in the Macri days) as none of the RIGI investments will go forward unless/until currency and capital controls are lifted. The BCRA is out of cash and the music will stop soon unless the IMF comes through with fresh funds; one of the IMF's requirements for fresh funds is a free floating rate that the BCRA can intervene on if overshooting occurs.

A jump in the blue dollar rate does not cause even close to the same increase in prices as a devaluation of the official rate causes; the proof of this is the beginning of Macri's administration and the results of the Milei administration so far. Macri thought that devaluing the official rate (9-1) to the parallel rate (15-1 at the time) would not result in excessive inflation because they (erroneously) thought the economy was already priced at the parallel rate. Milei devalued from 400 to 840 (parallel rate was about 1000 at the time) to 1075 today and you have seen the resulting surge in prices of 200%+ even though the blue rate has barely budged 25% in that time span.

 

[Stephano]

Today the blue dollar is down 35 pesos to 1245 (according to bluedollar.net). It looks like that the forces that are keeping the dollar low are still alive and kicking.

 

[Redpossum]

Aaaand right back up to 1280 today

In other words, the gov't spent a bunch of dollars to stomp it down yesterday, but the pressures driving it upwards are still there.

 

[DavidS]

As I see it, price increase already happened on expectations of peso fall, that did not happen. But prices pretty much stayed elevated, so I guess there isn't much space for increase, at least at basic products. I'm not huge fan of milei, but I really hope he has some masterplan to get this through. Unlike majority here, I don't care how much my euros are getting here, if people are living better. But in my opinion it would be the best for everyone, if usd would be at 1500 pesos, while prices remained the same... Wishful thinking..

Except that most are living far worse than before

 

[DavidS]

Today the blue dollar is down 35 pesos to 1245 (according to bluedollar.net). It looks like that the forces that are keeping the dollar low are still alive and kicking.

Lousy meanwhile restaurants and grocery stores increased 15 to 20% on the street in the past few days.

 

[Stephano]

Lousy meanwhile restaurants and grocery stores increased 15 to 20% on the street in the past few days.

I am amazed to see that despite these increases well above the purported inflation many restaurants and bars are still reasonably full, although not as in the past.