dollar-peso rate

[malbec]

I am no genious in finance. But I remember what happened in the late 80's/early 90's. The property market seems to be quite unaware of the peso in Argentina. Everyone talks about a "historical price" i.e. more or less the price in dollar around fluctuations happen.There is never hyperinflation in the property market. Prices might go up, but in no way at such high rates like inflation (we had some hundreds-% in the 80's). This effect is what I meant. Prices and wages increased quickly (peso-inflation...just to name it somehow) but property prices stagnated (and indirectly became "cheaper", because wages were higher).I read some time ago that even experts can't explain what happens with the argentine economy...hundreds of Phd and Master students around the world write about it every year, how problems can be solved, etc etc. Even the infamous Ministro Cavallo was highly regarded at Harvard (and got some distinctions too). We argentinians have learned that every 10 years we have a new crisis. Life goes on...(as long as we can afford asado).

 

[Matty]

Let us revisit this thread,please.. as I see that the topic as relevant considering today the exchange for the dollar to a peso is 3.03 . And by keeping the exchange rate low like this how does this appeal to the investors from foreign countries - or does Argentina want that money?
So at the rate this is going in a few weeks does that mean the exchange will be 2.50 is to one dollar. Where does inflation come into play here? I know there are no drastic salary increases that I have heard off from friends and family members.
Can we revisit this please - BBW, what is your take on this 1 1/2 years later after you original post?
In April/May the exchange was 3.24pesos to a dollar. Here we are 98days into the farmers strike and the rate is 3.03pesos to a dollar - so actually the strike is giving value to the peso?

 

[perry]

I beleive this is a new trend that is unstoppable and contrary to most have beleived for a long time this will inevitably happen. Inflation and the weak peso have had a direct correlation.
In 6 months time it will be 2.50 to the dollar thats my call.

 

[soulskier]

Waiting for those smarter than I to respond. Correct me if I am wrong, but since the strike started, the peso has actually gained against the dollar, aka gotten stronger. I would think that defies logic, but then I remind myself, "estamos en Argentina".

 

[bigbadwolf]

Can we revisit this please - BBW, what is your take on this 1 1/2 years later after you original post?
In April/May the exchange was 3.24pesos to a dollar. Here we are 98days into the farmers strike and the rate is 3.03pesos to a dollar - so actually the strike is giving value to the peso?

If global food prices remain high and Argentina remains an aggressive exporter, it can live with high domestic inflation and unchanged exchange rates for some time (albeit food and commodity producers will realise less in real terms because of the attrition of inflation). Ultimately, however, high inflation invariably translates into weaker exchange rates.
I don't what the situation is in Argentina. I suspect people are shorting the peso because they see the strike as a harbinger of trouble ahead. The dollar is a safe haven compared to the peso.

 

[Matty]

Thank you BBW . I would hate to think what else (trouble) could be up ahead but..whatever it is, we will weather that storm too.
So what I have learned here today is something is brewing up ahead and it is better to keep them in dollars than in pesos - got it!