The peso and the dollar have been in free fall against the euro the £££ and most other currencies for along time mainly due to inflation and the peso losing about 6 or 7% of its value against these currencies anually and in the dollars case the usa being laden with so much debt and borrowing so much money to pay the interest on the debt .The Argentine gov has been accumulatiing $ dollars in recent years($50 billion of them) in order to keep the peso weak and help the export driven recovery in the economy.
Now the government sees the farmers latest strike as being unreasonable and of not acknowledging this aid or the subsidised fuel that the argentines benefit from.
So the government has stopped buying dollars thus causing the peso to strengthen,some say the peso should be at about $2.20 to the dollar which would wake the farmers up abit as they would suddenly realise just how good they have had it.
The stronger peso will also help to control inflation by reducing the cost of imports ,but it will depend if the savings are passed on or not.
Windy, does you realize that writing "being laden" is really close to Bin Laden when talking abut the dollar? Was that a fraudlent slip?Seriously, thanks for the explanation, I think it makes a lot of sense. What would 2.2 pesos to the dollar do for the locals? For foreigners, it would make most thing no longer inexpensive but closer to home country prices.
Soulskier, yes we DO (not does) realize that "being laden" is close to Bin Laden. And I believe "fraudulent" slip was neither a Freudian slip.
On a more serious note, about the poor,cold and miserable section of society here that moral task being given to the politicians is like having the wolf watch the chicken coop - and that is why the peso having gained value still leaves the poor hungry, destitute and very cold this winter. The foreigners can always opt for going to USA when the exchange rate is back to 1:1
Let us not forget there was THAT suitcase full of money that is helping the value of the peso go up - who knows for one suitcase caught how many suitcases full of dollars come in undetected.
The suitcase full of money was it apears to help with cristinas re-election and nothing to do with the pesos rise. The pesos rise is being caused by not buying more dollars and selling some of those they hold.
The suitcase full of $$$$$ is/was another issue
I must be mistaken then. Sorry about that windy.
I was not aware that CK was RE-elected, she was president before? Was that before of after Nestor's presidency? Re-elected, huh? Not a common knowledge in this part of Buenos Aires. But anyhooo... And trust me, her being in office has everything to do with the PESO rise. I must have imagined the lines, correct that - VERY LONG lines in Microcentro 2 1/2 weks ago when people were standing in these loooong lines at the banks buying and taking their dollars out. And the sudden re-appearance of arbolitos on Florida.. One wonders what that is all about.
My vote still goes to - peso to dollar value manipulation.
And again my apologies for bringing up the subject of suitcase of money.
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