Fall Of The Blue Dollar

[weissbr]

I've been watching from afar and planning another trip to BA.

Over time, the blue dollar has declined from about 15 to about 12.7
a reduction of about 15%. At the same time, the official rate has
gone up to 8.8 or so. They used to move in tandem in the same direction.

Anybody have a clue why?

Thanks

 

[glasgowjohn]

The government manipulates both rates for its own political purposes.

Market forces have limited effect on foreign exchange transactions in Argentina

 

[wild_horses]

The government manipulates both rates for its own political purposes.

And what would that be?

Market forces have limited effect on foreign exchange transactions in Argentina

Thanks god!

 

[dennisr]

http://www.bubblear.com/argentina-blue-dollar-stability-at-the-price-of-economic-logic/

 

[mimyr]

http://www.bubblear....economic-logic/

From that article:

Yet when you look at the ratio of Argentina’s money supply to the dollar reserves (basically just divide how many pesos are floating around out there by how many US dollars there are in the Central Bank), you come up with the rate of ARS 14.74/USD, more than 2 pesos higher than the current blue dollar rate.

How is quantity of dollars vs quantity of pesos an indicator for what the true rate of exchange should be?

 

[ajoknoblauch]

And what would that be?

Thanks god!

Imaginary supernatural beings have no effect on the exchange rate.

 

[dennisr]

From that article:



How is quantity of dollars vs quantity of pesos an indicator for what the true rate of exchange should be?

My interpretation:
It is a "backing ratio." AR pesos in circulation are backed up (valued) by the amount of us dollar reserves deposited in the AR Central Bank. Is an oversimplification of a very complicate valuation. Difficult to get a true value of the AR peso because the numbers and money supply are manipulated and moreover, ar peso is a non-convertible currency.