Rich One, it's a good question. But I'm not sure if you meant the dollar itself will literally lose value (which of course it does in relatively small increments over time, though it fluctuates a bit too) or if you meant if the peso will gain value against the dollar. I think the dollar will remain more stable than the peso, at least unless/until the US economy crashes (for whatever reason) or Argentina becomes economically productive.
We thought about this (if the difference of the value of the blue rate vs peso would not increase more than 20% over a year), when I signed the lease on my current apartment. The agreed-upon built-in inflation rate was still the old 20% for our landlords, even though many others were hitting 25% and 30% before we signed our lease. I told them the blue dollar (which is what we used as our base rate calculation) would hit around 13.5 - 14 around the end of our first year. We made a deal that if it didn't hit 13.5 (the magical 20% point) I'd give them the 20% increase, but would pay in pesos instead (sorry, can't have it both ways!). Of course, thanks to Cristina's manipulation of the currency it didn't hit 13.5 (although a month or two before the end of our first year it was edging close - but it was around 12.5 when the end of the first year hit) so I gave them the 20% increase - in pesos as was the agreement. About a few months later the rate edged up to 14 and then 15 and stayed within a few cents for awhile and has fallen back around 14 again. I ended up paying less than I would have if we'd stayed in dollars. This is the first time for me that an owner wanted an "out" if the dollar wasn't at a certain price and they will lose for this contract, overall.
Long-term this has worked out for both me and the landlord. I have always paid pretty much the same rate in dollars - I'm paying the exact same rate now for my apartment that I paid for my last apartment for 4 years (no escalation clause), and within about 5% same rate I paid for the house in Garin some 6-7 years ago. It's the peso that moves and loses value historically. Who knows, that may change in the future. I may be finding out how much in dollars rents have risen after the last year's "K successes" here pretty soon.
The funny thing is, at least it seems to me, that people (at least here in Recoleta) value their rent in dollars, even when they publish in pesos, anyway, then have that 30% aumento on top...
I know people who pay their household help based in the blue dollar rate, but pay out in pesos. These lucky employees get a raise every time they're paid, at least until now. As long as the peso loses value (even if very slowly in the future), they will continue to get raises, even if only small ones. Of course, at some point the dollar base will have to change too.
We thought about this (if the difference of the value of the blue rate vs peso would not increase more than 20% over a year), when I signed the lease on my current apartment. The agreed-upon built-in inflation rate was still the old 20% for our landlords, even though many others were hitting 25% and 30% before we signed our lease. I told them the blue dollar (which is what we used as our base rate calculation) would hit around 13.5 - 14 around the end of our first year. We made a deal that if it didn't hit 13.5 (the magical 20% point) I'd give them the 20% increase, but would pay in pesos instead (sorry, can't have it both ways!). Of course, thanks to Cristina's manipulation of the currency it didn't hit 13.5 (although a month or two before the end of our first year it was edging close - but it was around 12.5 when the end of the first year hit) so I gave them the 20% increase - in pesos as was the agreement. About a few months later the rate edged up to 14 and then 15 and stayed within a few cents for awhile and has fallen back around 14 again. I ended up paying less than I would have if we'd stayed in dollars. This is the first time for me that an owner wanted an "out" if the dollar wasn't at a certain price and they will lose for this contract, overall.
Long-term this has worked out for both me and the landlord. I have always paid pretty much the same rate in dollars - I'm paying the exact same rate now for my apartment that I paid for my last apartment for 4 years (no escalation clause), and within about 5% same rate I paid for the house in Garin some 6-7 years ago. It's the peso that moves and loses value historically. Who knows, that may change in the future. I may be finding out how much in dollars rents have risen after the last year's "K successes" here pretty soon.
The funny thing is, at least it seems to me, that people (at least here in Recoleta) value their rent in dollars, even when they publish in pesos, anyway, then have that 30% aumento on top...
I know people who pay their household help based in the blue dollar rate, but pay out in pesos. These lucky employees get a raise every time they're paid, at least until now. As long as the peso loses value (even if very slowly in the future), they will continue to get raises, even if only small ones. Of course, at some point the dollar base will have to change too.
