Western Union money transfer

[sneakrnet]

I'm not sure what the economic situation was in Argentina back in October 2020 (other than COVID), but there seems to be a lot happening both internally in Argentina and globally with recessions and war. Alberto seems severely weakened, currency reserves are low and IMF deadlines incoming fast.

Massa seems like a positive effect on the market right now, and is looking to get more reserves through US and EU banks. But who knows with Argentina. Wouldn't be surprised for it to rebound shortly.

Look at this chart of the blue and you can see what happened in Oct. 2020 and what is happening now: https://bluedollar.net/informal-rate/

1. There was a panic reaction then as now. Time will tell if this panic was justified.
2. Massa isn't going to get any reserves from anywhere. Nobody will give Argentina a cent. That doesn't mean that they don't have ways to control the dollar. We've seen it many times over the years.
3. It's terrible when this happens like this, because all the businesses raise their prices when the dollar spikes, and never lower them again. And what's worse is that when the dollar rises again, later, they'll raise the prices again!
4. If you look at the chart, you'll see that there were several partial rebounds that ultimately failed. It took a year before the dollar reached 195 again, and in that time there was inflation of 50%, so it was hardly exciting news. Not good for people with dollars, not good for people with pesos. A few Argentinos with strong unions managed to stay level with the inflation. Everyone else lost.

 

[hotfuzz]

Look at this chart of the blue and you can see what happened in Oct. 2020 and what is happening now: https://bluedollar.net/informal-rate/

1. There was a panic reaction then as now. Time will tell if this panic was justified.
2. Massa isn't going to get any reserves from anywhere. Nobody will give Argentina a cent. That doesn't mean that they don't have ways to control the dollar. We've seen it many times over the years.
3. It's terrible when this happens like this, because all the businesses raise their prices when the dollar spikes, and never lower them again. And what's worse is that when the dollar rises again, later, they'll raise the prices again!
4. If you look at the chart, you'll see that there were several partial rebounds that ultimately failed. It took a year before the dollar reached 195 again, and in that time there was inflation of 50%, so it was hardly exciting news. Not good for people with dollars, not good for people with pesos. A few Argentinos with strong unions managed to stay level with the inflation. Everyone else lost.

Very interesting chart. Thanks for providing that link. Like I said earlier though, there are a lot of new factors that were not present at the time. We are also heading towards a triple digit inflation this year, versus 42% and 50% in 2020 and 2021 respectively.

The only point that sucks is the price adjustments that occur, which like you say will never lower again. I'd be fine with the CCL and blue holding or falling if it somehow lowered inflation, but we know that will not happen.

 

[jblaze5779]

I transferred enough for a couple months before the bottom fell out. The last time this happened, in Oct. 2020, It continued to go down for months and took more than a year to recover. Who knows what happens this time, but I don't see things going back up well above 300 again for awhile. This is Argentina, though...

No more ability to utilize the printing machine this year though.

 

[jlynch]

the government printed an equivalent to nearly the entire monetary base in June/July this year and the peso/dollar rate is directly related to this.

Dólar caro o barato: el indicador que miran los analistas para determinarlo

El dólar está cayendo tras los cambios de Gabinete. Sin embargo, hay medidas técnicas que podrían estar anticipando una baja mayor. Pese a la baja del dólar, también advierten que no hay lugar donde colocar tantos pesos en el mercado.

www.cronista.com

 

[antipodean]

3. It's terrible when this happens like this, because all the businesses raise their prices when the dollar spikes, and never lower them again. And what's worse is that when the dollar rises again, later, they'll raise the prices again!

“Dollar inflation”, aka argentinas time tested and trusted savior.

I wouldn’t be surprised if this recent “panic” was planned ahead of time, after all, according to the government, “a devaluation of the peso is never the solution” … well, those precious pesos sure buy a lot less now and paritaria adjustments are still a few months away for most ;-)

 

[ojonnarv]

This tweet

https://twitter.com/x/status/1553155288382980096

Says that after the new Massa economic plan, WU will have to give dollars for all transactions.
What can happen if that is true? I think they will only allow transfers to bank accounts, making it almost impossible to get that money in bills and limiting the number of transfers (actually, dollar transfers between arg bank accounts are limited).

 

[hotfuzz]

This tweet

https://twitter.com/x/status/1553155288382980096

Says that after the new Massa economic plan, WU will have to give dollars for all transactions.
What can happen if that is true? I think they will only allow transfers to bank accounts, making it almost impossible to get that money in bills and limiting the number of transfers (actually, dollar transfers between arg bank accounts are limited).

Is this a reliable source?

So WU will have to give the bank actual dollars instead of sending them pesos? Will they transfer it to pesos or will the receive have actual USD?

 

[ojonnarv]

Is this a reliable source?

So WU will have to give the bank actual dollars instead of sending them pesos? Will they transfer it to pesos or will the receive have actual USD?

I am not sure if this is a reliable source.
He is saying that the Arg government will force Arg WU (and I think all the "remesas" companies) to give dollars instead of pesos.
No extra information was added in the tweet.

 

[antipodean]

This tweet

https://twitter.com/x/status/1553155288382980096

Says that after the new Massa economic plan, WU will have to give dollars for all transactions.
What can happen if that is true? I think they will only allow transfers to bank accounts, making it almost impossible to get that money in bills and limiting the number of transfers (actually, dollar transfers between arg bank accounts are limited).

It would not be without precedent, if true.This is what happens today in Lebanon if using WU (going through a similar crisis)

Sending and receiving money in Lebanon - Blog | Western Union

Questions about sending money to Lebanon? Here's how you can send and receive money to Lebanon via multiple channels.

www.westernunion.com

(fast forward to about 3 minutes, a painfully long explainer but shows how it works in practice there if anyone is anxious about what this could mean to them)

This forces remittance agencies like WU to actually send dollars to the country and then buy those dollars back from the central bank at their real dollar value. What happens when the customer receives those dollars, is of-course that they disappear into "cuevas" when they are exchanged in the "blue market" for local currency at rates well above the official. With a brecha of 1500%+ in Lebanon, I'm not actually sure how this helps the economic situation of the country... other than moving more dollars through government accounts for short periods of time.

In practice it also means that agencies struggle to get dollar notes to be able to pay out to customers... and use of dollars for domestic transactions, for example between bank accounts or digital transactions, is not allowed, meaning if you want it in your bank account it gets liquidated to local currency at the official (or whatever trading rate the government permits) far below its real value.

 

[Millie]

Hi all.,,
Is the GECO code still working ?
Thanks