How Is The Dólar Blue Determined?

[canadien]

There is a magic wheel painted in the floor of a room hidden inside the casa rosada. It has numbers inside it, like +10, +15, +50, -10, -20, you get the drift. Every few days, at night, there is a gathering between Cristina, Magnetto, Lanata, Messi, Piano and other celebrities. They get naked and start dancing while holding bottles of crystal. When someone pass out, they stop dancing and start screaming at a frighten chicken that has a cowboy hat. The first one that grabs it, has the honor of removing his head in a ceremony called "Wonka Wonka".

Once they do that, they thrown the chicken at the floor and see where it moves. If the body fells at +10, then they set the price 10 cents above yesterday's price. If it falls in around +50, they announce a new measure to help fix the rate. Then at the next morning, they call the owners of the mayor cuevas and they tell them to sell at that price.

Here is some proof:

hahahahaha!
ouff, thanks for that!

 

[Inferno.]

Just to contribute a serious response to the thread, the price (at least for what I know) is not being fixed by anyone because there isn't a central place to fix it. There are a few mayor "cueveros" like the owner of Banco Piano and the broker Puentenet (the two that moreno always speaks with) that are in the black market business. They are moving a lot of dollars, so they are in a position that can indeed influenciate in the price. They are not selling to people, but other cuevas, that also sell to other small ones/companies, etc.

Is like a regular market, you have the manufacturer that sells to big resellers at a price. They sell again the product to other smaller companies a a higher price until at some point it reaches you at an even higher price. I don't know how moreno nor the govermnent are related to them, what business are they doing.. but I'm sure no one is clean and if they sell less or more one day is because they arranged something in the back.

And well, Miss Montaunk explained that the price seen on the newspapers/tv is just an average of the price of the cuevas. They call and check the price, there isn't an index or something like that. If I have 50 millions to move each week.. and I dont sell below 11 because I don't want to, the price will go up because the rest of the cueveros will raise the price below my price to sell more because there is less offer in the market now that I'm gone. And if I want to lower the price, I can just flood the market with more dollars that I was selling forcing everyone to lower the prices.

At least this is how I believe the market is functioning.

 

[Rich One]

What I heard on the radio was this*:
to find out what the blue rate is, the people who work for a website or a newspaper call up various cuevas (illegal exchange houses) and ask
"what are you exchanging dollars for today?"
They then average this out and publish.
Now, let´s say you want to manipulate the blue rate for political reason. You call up a cueva and say "next person who comes in, sell them a pesos 10% higher than normal". When they get the call from the website or newspaper, they can say, without lying, "it is 11 to 1".
(that would be someone from the opo, from the government the request would be to lower to 7:1)
This is why it is often hard to actually get the published blue rate, you will most likely get a few cents less.
There is a lot of manipulation going on, from speculators, the government, the opposition, etc.
If you believe the blue rate as an economic indicator, then the economy has been in a freefall in the past few months. While there has been inflation, the economy is experiencing a low growth rate and there is inflation, but it is not in recession, much less a free fall.
Dollar manipulation has a long history in Argentina, this time the gov´t has been able to fend it off better than in the past.

*Radio show I listen to is "no somos nadie" and I would say it is pretty middle of the road--it interviews both gov´t and opo.

No somos Nadie!! said ?

Suggest you refer to Ambito Financiero which is pro govt. up to the minute quotes of the dollar Blue..!!

http://www.ambito.com/economia/mercados/monedas/dolar/

 

[sesamosinsal]

What I heard on the radio was this*:
to find out what the blue rate is, the people who work for a website or a newspaper call up various cuevas (illegal exchange houses) and ask
"what are you exchanging dollars for today?"
They then average this out and publish.
Now, let´s say you want to manipulate the blue rate for political reason. You call up a cueva and say "next person who comes in, sell them a pesos 10% higher than normal". When they get the call from the website or newspaper, they can say, without lying, "it is 11 to 1".
(that would be someone from the opo, from the government the request would be to lower to 7:1)
This is why it is often hard to actually get the published blue rate, you will most likely get a few cents less.
There is a lot of manipulation going on, from speculators, the government, the opposition, etc.
If you believe the blue rate as an economic indicator, then the economy has been in a freefall in the past few months. While there has been inflation, the economy is experiencing a low growth rate and there is inflation, but it is not in recession, much less a free fall.
Dollar manipulation has a long history in Argentina, this time the gov´t has been able to fend it off better than in the past.

*Radio show I listen to is "no somos nadie" and I would say it is pretty middle of the road--it interviews both gov´t and opo.

Of course there's manipulation. There's manipulation in every market, especially currency markets. It's how the game is played.

With that said, nobody is being forced to buy dollars. They have to accept the price. The casas de cambio, if they are indeed involved in the "illegal" dollar, take on a significant risk as well. These people aren't just dealing with dollars, but pesos as well. It's not as if they have a never ending stream of dollars.

The market may be informal and manipulation is a given, but laws of supply and demand are still probably more relevant. The price likely peaked to get rid of excess pesos. Now it will be interesting to see if it continues going higher. Clearly, entities are buying at these levels.

 

[Montauk_Project]

And well, Miss Montaunk explained that the price seen on the newspapers/tv is just an average of the price of the cuevas. They call and check the price, there isn't an index or something like that. If I have 50 millions to move each week.. and I dont sell below 11 because I don't want to, the price will go up because the rest of the cueveros will raise the price below my price to sell more because there is less offer in the market now that I'm gone. And if I want to lower the price, I can just flood the market with more dollars that I was selling forcing everyone to lower the prices.

At least this is how I believe the market is functioning.

Actually when the government wanted the price of the dollar to fall they would do just that, sell off reserves from the banco central.

 

[dennisr]

My two cents:

Supply and Demand

No expert, believe many variables are baked into the price of the blue dollar: inflation, interest rates on deposits, devaluation, currency restrictions, consumer sentiment.

NDF market in New York for ARS suggest blue shall be around $14.50 by year's end. Just on that information alone, dollar at $10.50 is a bargain. Will realize a 40% return in less than 9 months. Holding dollars insulates the holder from devaluation, inflation, restrictions and about anything else the brain trust can come up with. Only game in town.