Dollar $11,65 Pesos Unstoppable Tommorow Over $12 ?

[Joe]

So the central bank is not selling dollars to anyone and giving notes of credit instead? What does this mean? They're protecting their last remaining dollars? Forgive my limited grasp of Castellano and economics, es como decir "lunfardonomics".......

My guess is that since it is getting near the end of the presidential term, this week's allotment of dollars was earmarked for a vault down in Santa Cruz.

 

[germano]

My guess is that since it is getting near the end of the presidential term, this week's allotment of dollars was earmarked for a vault down in Santa Cruz.

Or because Joe already smoked out the cuevas and the central bank lost its source for dollars ...

 

[GS_Dirtboy]

The government's Dollar reserves drives Argentina monetary policies. If you want to know the near future of Argentina just play out what dwindling Dollar reserves means ... Peso devaluation, continued inflation, subsidies cuts, and every outlet that lets Dollars out of the system will probably get cut off. Examples - using Arg cc for Dollar-denominated purchases, legal repatriation of Dollars for foreign-owned property sales, cuevas selling Dollars, etc.

 

[EdRooney]

GS I read your post 3 times and I still can't figure out what you are trying to say. (Granted I'm not the sharpest tool in the shed, but still...)

Are you saying that the Arg Govt is constricted in its monetary policy because it is trying to stem the outflow of reserves? Or are you saying that all the things you mention (inflation, capital flight, subsidy cuts, devaluation...) are the result of dwindling reserves?

Because looking at the K's history, maintaining reserves would not seem to be the priority of their fiscal policy, and they seem to take actions (eg, refusing to implement austerity to stem inflation, generally expanding the monetary base...) that don't prioritise accumulating more reserves, nor do they seem unnerved by drops in reserve levels.



...Actually, I just read your post a fourth time. Do you mean capital controls instead of monetary policy? Either way, would you mind clarifying a bit because it seems like you're making a salient point.

 

[GS_Dirtboy]

The K govt has changed its tune. It appears to me that they are trying to stem the flow of Dollars. They have gotten VERY practical in the last 6 months. I think they realize that if the Dollars run out they are seriously screwed. They were hoping to have had a favorable decision by now from the US Supreme Court and were going to play that card in getting international credit. Has not happened yet. Soy Dollars are running out. They cant keep propping up the Peso indefinitely so it will devalue again in June. They have built financial house of cards and its starting to come apart on them. Since the Peso has no value outside of Argentina they really dont have many options. The optiins they do have are al labeled orthodoxy.

 

[ajoknoblauch]

My guess is that since it is getting near the end of the presidential term, this week's allotment of dollars was earmarked for a vault down in Santa Cruz.

More likely, Switzerland or the Caymans.