What do we think will happen with the exchange rate?

[sergio]

When has pricing ever come down, over the long haul, anywhere?
My guess is Argentina will become like Uruguay.
4 times the cost, in dollars, for everything.
After all, Uruguay has free foreign exchange rates, not dollarisation but no barriers to dollars coming and going. You can get dollars at the atm.
and Uruguay has the same basic shipping costs, and pays basically what Argentina would pay for any imports.
Uruguay has the magic "investors" and yet, somehow, its still expensive. The chinese built auto assembly plants there, the rich Norwegian guy Alex Vik builds luxury hotels and restaurants, hell, they even have a Trump Tower...
The "free market" tells us that the prices in Uruguay, and the wages, are what a Rio Platenese country will settle at.
If that were to happen here, the poverty rate would double.
Uruguayans are the first to tell you how only rich tourists can afford Uruguayan prices, and how wages there dont allow them to do much but just get by.
Please, explain how Argentina will magically be 1/4 the cost of Uruguay, or have prices "come down", if all the same geographical, FX, climate, and economic rules apply?

So will you stay on if everything costs 4x the price?

 

[antipodean]

If that were to happen here, the poverty rate would double.

So 90% or more, based on last year’s and today’s starting point?

Am curious to know how Uruguay “only” has a poverty rate of around 10% with this logic…

 

[TWB103]

Uruguay is not comparable to Argentina in many senses. Argentina is a much larger country, has greater economies of scale, more economic and industrial, educational and cultural diversity etc , more potential with its environment and natural resources, and human resources, has probably the 'best' capital city in South America, more regional and global influence - much more POTENTIAL in general. Better to use Ecuador as comparison than Uruguay. Things might not be perfect in Ecuador but by most accounts life has improved by having a stable currency.

 

[Ries]

So will you stay on if everything costs 4x the price?

Me, most likely yeah. I take the colectivo's most days, walk a lot, cook at home a lot, and own my place. Taxes and utilities, even at 4x current, are still far below what I pay for my US place.
I am on SS, dont earn in pesos, and so I am in a much better situation than friends here- like the University professors who earn $500USD in the official rate of 3 months ago...

 

[Bajo_cero2]

With Macri they frozen the exchange rate and we had inflation in USD. Probably the same.

 

[Rich One]

With Macri they frozen the exchange rate and we had inflation in USD. Probably the same.

Very true , it already happened during Menem's late second period 1995-1999. Buenos Aires was the most Expensive capital in the world.

 

[QuilmesSlo]

Very true , it already happened during Menem's late second period 1995-1999. Buenos Aires was the most Expensive capital in the world.

I don't see a return to this any time soon; the price levels from that era were premised on huge capital inflows. It's going to take quite a few years of stability before you see meaningful foreign direct investment (I don't mean foreigners buying apartments, I mean sponsors building mines again like Minera Alumbrera, or similarly scaled oil and gas projects). In my view, that kind of trust is hard to win back after the country's track record of instability and appropriation.

 

[FrankPintor]

Uruguay is not comparable to Argentina in many senses. Argentina is a much larger country, has greater economies of scale, more economic and industrial, educational and cultural diversity etc , more potential with its environment and natural resources, and human resources, has probably the 'best' capital city in South America, more regional and global influence - much more POTENTIAL in general. Better to use Ecuador as comparison than Uruguay. Things might not be perfect in Ecuador but by most accounts life has improved by having a stable currency.

I think you have to be careful comparing countries, Ecuador now has 3 hour power cuts per day and public safety problems of such a scale that a friend of mine who lives in a residential part of Durán (Guayaquil) regularly walks past dead bodies on the way to work.

Ecuador also failed its citizens monumentally during the pandemic, with dead bodies put out on the streets for their eventual collection. It would be better compared to, say, India, than Argentina.

 

[Rich One]

Before we know, by March the gap will be 50% bet. Blue and Official and mid year 2024 perhaps 100 % gap..!

 

[perry]

Before we know, by March the gap will be 50% bet. Blue and Official and mid year 2024 perhaps 100 % gap..!

It will not happen imho as Milei is determined to stop this double exchange rate . Of course life is becoming very difficult due to high cost