Will Argentina return to a system of multiple exchange rates?

[jimdepalermo]

Have you noticed that the press has begun talking about the "Blue" rate for informal (i.e. unregulated) currency transactions? This hints at legitimizing the secondary market, from "black" to "blue."

In a class on Argentine economic history I'm taking at Di Tella, we recently got into ad-hoc solutions to the currency crisis in 1929. The eventual solution then was to separate the regulated exchange for traditional imports and exports from an unregulated market that covered non-traditional imports and exports as well as casual transactions. The unregulated rate tended to be 18-25% higher than the "official" regulated rate of exchange.

The practice evolved off-and-on into the 1950s, and variations were revived from time to time - I think into the 1980s - to patch "temporary" problems.

It seems to have reached its most elaborate point early in the Peron years, when Argentina did not join the Bretton Woods consensus. As an example, here's a table I found in an NBER paper from the 1980s:

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So the discussion question is the likelihood that we're moving into another period with a variety of official exchange rates.
And how that will affect expats with earnings in dollars or euros.​

 

[el_expatriado]

There are 3 exchange rates in Argentina today. Argentina already has multiple exchange rates.

The official rate.
The "blue" rate.
Contado con liquidación.

If you earn money in pesos and pay taxes in Argentina, you might be able to buy dollars in the official market at $4.40. If not you can buy blue dollars for $5.10. If you need to move huge sums of money and you don't want to deal with government approvals the only option is contado con liquidación and the most recent rate was $5.35.

If you are a foreigner who has dollars, everything is reversed the best option is to use contado con liqui in reverse if you have serious cash to move. For smaller sums, sell dollars in the blue market. It almost never makes sense to sell dollars in the official market because you are getting paid less than the dollars are worth.

The official market today is not the real market. It is not the real price for the peso. It is not a free market and foreigners should not be duped into using it.