It's started......

[ndcj]

That's a really stupid mentality. Grow up! Adults should not have to ask permission to do everyday things like sending money or converting currency or anything else that does not harm anybody else.

Grow up indeed. Regardless of your opinion on the merits of the restrictions, it's a practical problem with a practical solution. There might be a practical solution to puvenlee's problem.

 

[ndcj]

http://en.mercopress.com/2011/11/16...t-accept-surplus-pesos-from-the-summer-season

Supply / Demand. Argentina doesn't want to repatriate it's own currency. That will push the official rate lower against other currencies.

Right, now go to the US Federal Reserve and ask them if they'll take back US dollars in return for Euros, or British Pounds. Of course they won't, they'll tell you that you need to liquidate your position on the open market.

Why should it be any different here? Why should the BCRA trade on a preferential basis with some holders of currency and not others? Wouldn't all you rabid free market at any cost types be up in arms then, too?

 

[Rad]

Right, now go to the US Federal Reserve and ask them if they'll take back US dollars in return for Euros, or British Pounds. Of course they won't, they'll tell you that you need to liquidate your position on the open market.

Why should it be any different here? Why should the BCRA trade on a preferential basis with some holders of currency and not others? Wouldn't all you rabid free market at any cost types be up in arms then, too?

Very Pavlovian of you. Someone points out something about Argentina and since you don't like it, you immediately switch to US Fed.

I was simply highlighting the obvious currency exchange pressures that exist.

 

[ndcj]

Very Pavlovian of you. Someone points out something about Argentina and since you don't like it, you immediately switch to US Fed.

I was simply highlighting the obvious currency exchange pressures that exist.

Nothing US specific (or Argentina specific) about it. Feel free to substitute any other country instead of US, I was just using it as an example of a central bank that's definitely in the "free market" column.

Can the central bank of Uruguay sell its reserves of Brazilian Reals directly to the Brazilian central bank, or do they have to liquidate those on the open market too?

 

[Rad]

Grow up indeed. Regardless of your opinion on the merits of the restrictions, it's a practical problem with a practical solution. There might be a practical solution to puvenlee's problem.

Actually the practical solutions to the idiotic restrictions are in the grey market.
If the government was trying to restrict grey market flows of currency, they have already failed.

 

[Rad]

Nothing US specific (or Argentina specific) about it. Feel free to substitute any other country instead of US, I was just using it as an example of a central bank that's definitely in the "free market" column.

Can the central bank of Uruguay sell its reserves of Brazilian Reals directly to the Brazilian central bank, or do they have to liquidate those on the open market too?

You don't get it and you are making my point. If the Uruguayan bank could get rid of the ARS at the official rate, they would do it. Clearly, they can't and that's the reason why they are selling USD for 5.85 ARS instead of the official 4.30 ARS.

 

[Crema Americana]

Right, now go to the US Federal Reserve and ask them if they'll take back US dollars in return for Euros, or British Pounds. Of course they won't, they'll tell you that you need to liquidate your position on the open market.

But you can exchange dollars for foreign currency in certain banks in the US and just about anywhere... US dollars are much easier to liquidate on the open market than pesos. Who wants pesos? They lose their value and now it's even more difficult to unload them into a more stable currency making them even less desirable.

What are the Uruguayans supposed to do with the pesos now? This is where you enter the dangerous territory of your money being worth little more than as kindling (or at least having that reputation.)

I think this is just another protectionist practice that has less to do with catching tax evaders than it does with trying to prevent a run and collapse. There isn't a better way to keep track of pesos and who's earning/paying what than tracking who buys dollars at the bank? I have to say it's pretty ridiculous to have to sign forms and show proof of income and savings to just exchange *your* money.

I really want to see Argentina succeed, but I just think this is rotten policy.

 

[ndcj]

You don't get it and you are making my point. If the Uruguayan bank could get rid of the ARS at the official rate, they would do it. Clearly, they can't and that's the reason why they are selling USD for 5.85 ARS instead of the official 4.30 ARS.

I think it might actually be you who doesn't get it. The BROU has a position on Argentine pesos more than they would like, and they've asked the BCRA to help them unwind that position very quickly, rather than the slower method of dealing with supply and demand.

They can sell them at the official rate, just not as fast as they would like. The ARS has always been a fairly illiquid currency outside of Argentina and its neighbours. We're not talking about an internationally "important" currency here.

You can sell your ARS outside Argentina, but it's more difficult than selling, say, Australian dollars. The same is true of all popular currencies around the world.

The BROU was simply looking for a favour from the BCRA to balance out their currency positions, and they were shot down. No one is suggesting that the Uruguayan central bank is planning on selling its pesos in the parallel market -- in fact, that would be unheard of. They just don't want any more ARS, so they're effectively pricing themselves out of the market.

MercroPress is just a trashy opinionated blog, pretty much. Have a look at French Jurist's post in one of the other threads to get a bit more of the context in this story:

http://baexpats.org/expat-life/18471-anyone-bought-us-week-4.html#post137258

 

[Raymond]

Interesting on tv last night seeing the obvious difference between Argentines and Brasilians, almost every shop they approached would´nt accept Dolars and on the street given the option of dolars over reals, brasilian money won every time.
Not surprising companies like this one in Germany are doing great trade in small gold sales http://www.kb-vision.com/?s=superaffiliates (company overview/affiliate link)