Finally ! the devaluation we were waiting for will take place on monday !

[French jurist]

It's something we were waiting for but when would it have happened ?
Today, right after the closing of the forex market at 3 PM, economy minister Amado Boudou together with President Kirchner announced that, in order to keep foreign investments coming to Argentina, a devaluation of 45 % of the peso (e.g. = dollar will be worth close to 6 pesos) will be effective on monday !

Champagne for all !

http://www.lanacion.com.ar/1362023-devaluacion-del-peso-por-el-dia-del-cuatro-de-abril

 

[LAtoBA]

April Fools

 

[ptolemy]

you be very,very bad person.

 

[bernardinho1961]

It will be 5 by this time next year...and 6 before end of 2012.

 

[nikad]

4.50 by the end of this year tops

 

[BAwithkids]

4.50 by the end of this year tops

I read somewhere that the government wouldn't let it go higher than 4.11 pre-election (sorry, I can't remember where I read that) - given the level of inflation, it seems like higher than that would be likely. But then, I'm not an economist.

 

[gouchobob]

I read somewhere that the government wouldn't let it go higher than 4.11 pre-election (sorry, I can't remember where I read that) - given the level of inflation, it seems like higher than that would be likely. But then, I'm not an economist.

Yes from an economic standpoint but remember governments often intervene in the currency markets, right now the government wants to create the impression of stability so they won't want the Peso to fall too dramatically before the election. After the election watch out.

 

[BAwithkids]

Yes from an economic standpoint but remember governments often intervene in the currency markets, right now the government wants to create the impression of stability so they won't want the Peso to fall too dramatically before the election. After the election watch out.

Yes, what I read made it clear that the government would be trying to limit devaluation prior to the election - I wonder what will happen after it...

 

[dr__dawggy]

Nicely played Frenchie.

 

[French jurist]

Oh, that was an easy one, sorry.

About a possible devaluation, this used to be a recurrent subject on the forum one year ago (likely before too) but it is hardly mentionned now.

I sincerely thought (wished ?) one would occur before the elections, I was wrong.

I wonder what is, political opinions aside/just economics & eventually the political calculations included, the potential of a devaluation occuring before/after the election :
- in terms of export (soja bean, etc.)
- in terms of local salaries (and moreover the overwhelming proportion of low salaries)
- well, all aspects being taken into account.

Of course, that would be a big blow to the expats still making an income in pesos (there still are). But while I usually can elaborate answers to particular situations, regarding Argentina & economics in particular, I still have trouble foreseeing what's coming, even after 8 years living here.