Hello, I've Only Posted In The Newcomer Forum Before

[Rich One]

I guess my somewhat wordy OP gets my real math question lost within... The value of UY-ARS pesos-to-pesos rate may be useful information for many, here, but my own question is actually about the US dollar rate in each country and why THAT is so disparate if the peso-to-peso rate seems so (roughly) similar.

What I struggle to comprehend is that if the similarity between the peso-to-peso rate is such that ~1.25 is the difference (whether from one currency to the other, or vice versa) then how is it that the US dollar rate, by comparison, is so wildly different as to be ~9 versus ~25 to the dollar in the 2 different countries? THAT is what continues to stump me.

Again, maybe if I know how to work it out in longhand, it would make sense to me... but I have only the basest arithmetic skills and in my mind's eye... it seems very tricky to comprehend this.

AGAIN, MANY THANKS!

Paul

Paul, very Simple Supply and Demand . In Uruguay they are flooded with Argentina pesos, they don't want them hence pay less for them.

Also the Dollar/Peso rate in Argentina is artificially controlled and kept at a fictitious LOW value , instead in UY it fluctuates with demand.

Therefore in a virtual currency free market according to the Ratio 1/1.25 the Argentine peso/Dollar should be (25x.75) = $ 18 which probably is the Real Value of the Blue Dollar here. If it wasn't for the current Official controls.???

 

[TomAtAlki]

I'm probably wrong but:

125AR = 100UY

or

at 14:1 it would cost you 9US to buy 125AR
at 9:1 (official rat) it would cost you $14US to buy 125AR

at 25:1 it would cost you 4US to buy 100UY

I think the extension question is how many AR would it take to buy UY in Argentina?

or

is there a profit to me made buying UY for US in Uruguay and selling the UY for AR in Argentina.

I'm guessing there is no profit or everyone would be doing it.

And accounting is certainly not my strong point. If someone understands this stuff would you please go through the numbers.

 

[rpkerston]

I *think* 'Rich One' probably nailed it! All the elements in his reply ring true for me, and it explains what my challenged math-head suspected was a true discrepancy but which I could not prove or understand. Now, I think I really do!

The equation, however, needs be left for somebody having a better grasp of these things than I - admittedly - do... I read equations and it's like my reading a scientific explanation: I read the full passage maybe 3 times and then realize that I've only re-read it absent-mindedly and still don't know what it says, so I, then, deliberately start breaking it down by clauses and sections, and going through it, building an 'if this, then that' scenario in my mind, and finally - as frustration levels rise... I scream... and then I realize that I probably could be heard screaming, and so I carefully change the language of my scream...