What financial instrument/policy is being used to control the dollar value?

[NoVegetables]

Does anyone know how the dollar is being kept at 1000 while general inflation of the pesos continues?

 

[SinPulgas]

Carlos Melconian: “La licuadora funcionó excepcionalmente, pero en algún momento fundirá biela”

Según el economista, el país se encuentra frente a un cambio cultural en el que ya no se cuestiona que el déficit fiscal es perjudicial; además, analiza qué pasará con el dólar y explica cuál es para él la verdad sobre la nueva fórmula jubilatoria

www.lanacion.com.ar

Read the part starting with: –¿Qué está pasando con el dólar?

 

[carride]

Does anyone know how the dollar is being kept at 1000 while general inflation of the pesos continues?

There is less supply of AR$ pesos since the new government stopped printing In December.

There is less demand for U$D dollars for a few reasons. One reason is people who saved those dollars in the past now are spending them instead of buying them.

 

[Ries]

nobody has the power to "keep" the dollar at any given rate. In the past when argentine governments have tried this, they spent tens of billions of dollars of borrowed money trying to support the peso. It doesnt work.
The peso floats based on supply and demand, consumer feelings and emotions, global conditions, wars, oil prices, weather, and more.
For the last few years we saw the dollar go up and sometimes down, and the peso track that.
But whats happening now is not being caused by the dollar, but by internal Argentine economics, worries, price increases and more.
Some is "inflation", but, for instance, the removal of price controls on rents meant that many argentines saw their rents go up double or triple on renewals of contracts, and this is affecting all kinds of things. This is not something the government could "control"- its what happens when you remove controls.

 

[Reply Guy]

nobody has the power to "keep" the dollar at any given rate. In the past when argentine governments have tried this, they spent tens of billions of dollars of borrowed money trying to support the peso. It doesnt work.
The peso floats based on supply and demand, consumer feelings and emotions, global conditions, wars, oil prices, weather, and more.
For the last few years we saw the dollar go up and sometimes down, and the peso track that.
But whats happening now is not being caused by the dollar, but by internal Argentine economics, worries, price increases and more.
Some is "inflation", but, for instance, the removal of price controls on rents meant that many argentines saw their rents go up double or triple on renewals of contracts, and this is affecting all kinds of things. This is not something the government could "control"- its what happens when you remove controls.

Remember when Marci said he was putting together the best economic team in 50 years?

Then decided to try exactly this - spent billions of dollars of borrowed money trying to support the peso.

 

[Rich One]

There is less supply of AR$ pesos since the new government stopped printing In December.

There is less demand for U$D dollars for a few reasons. One reason is people who saved those dollars in the past now are spending them instead of buying them.

Not necessarily true:

La "maquinita" de pesos en la era Milei: cuánto emitió el Banco Central y con qué fines

Desde el desembarco del libertario en la Casa Rosada, la autoridad monetaria mantuvo encendida la impresora de moneda nacional aunque modificó el destino de los montos. Por qué se habla de una emisión "benigna". La base monetaria cayó en términos reales pese a la creación de dinero.

www.perfil.com

"Consulted by PERFIL, the economist from the consulting firm Invecq, Manuel Cerdan, estimated that since Milei landed in Casa Rosada and until February 9, "$5.6 billion were issued for the purchase of foreign currency from the private sector, $5 billion for the payment of interest on remunerated liabilities, and $2 billion for other operations such as execution of puts.

However, Cerdan explained that all this mass of pesos issued "was counteracted via the placement of Leliq/Pases for -$6.9 billion and operations with the Treasury for -$4.7 billion." In the latter case, the repurchase of sovereign securities in the hands of the BCRA stands out.

 

[Quilombo]

The government manipulates the price of the dollar by having the BCRA buy or sell dollars, but maintains the cepo for almost all natural persons in the country. Every time Milei or Caputo is asked about when the cepo will be removed, they say when the time is right, because if they do it now they fear a run on dollars because despite them claiming the BCRA dollar is close to it's "real" value, it will only go up if people are allowed to buy as many dollars as they want.

We don't have a market determined exchange rate either under Milei, we have a crawling peg; the government set the value of the USD to be ~800 pesos when they took office, and buys and sells dollars each day to ensure that the devaluation averages out to be 2% a month.

As others have said, part of their policy is to induce a recession and destroy wages/liquidity so that people don't have money to spend on dollars because if everything is double or triple it's previous price in pesos just a few months ago.

 

[Ronnie Hotdogs]

The government manipulates the price of the dollar by having the BCRA buy or sell dollars, but maintains the cepo for almost all natural persons in the country. Every time Milei or Caputo is asked about when the cepo will be removed, they say when the time is right, because if they do it now they fear a run on dollars because despite them claiming the BCRA dollar is close to it's "real" value, it will only go up if people are allowed to buy as many dollars as they want.

We don't have a market determined exchange rate either under Milei, we have a crawling peg; the government set the value of the USD to be ~800 pesos when they took office, and buys and sells dollars each day to ensure that the devaluation averages out to be 2% a month.

As others have said, part of their policy is to induce a recession and destroy wages/liquidity so that people don't have money to spend on dollars because if everything is double or triple it's previous price in pesos just a few months ago.

… and everyone has to liquidate their dollars they’be saved for a rainy day?

 

[Quilombo]

… and everyone has to liquidate their dollars they’be saved for a rainy day?

When food prices are the same as in Europe I'd argue that it's raining, yes