Sharp drop on “blue” dollar reported in Argentina

Sharp drop on “blue” dollar reported in Argentina

The “blue” (a euphemism for “black market”) dollar has fallen sharply against the Argentine peso this week after Sunday’s elections and the subsequent fracture within the opposition JxC coalition regarding whether to support or not Libertarian Congressman Javier Milei’s bid against Economy Minister Sergio Massa at the Nov. 19 runoff.

So far in 2023, the blue dollar rose AR$ 729 after closing 2022 at $346. Having reached its peak between last week and Monday, the blue dollar was traded at around AR$ 950 / AR$ 1,000 (buy/sale) Thursday in “caves” (illegal currency exchange parlors) across Buenos Aires, it was reported.

The blue had reached AR$ 1,150 on Monday but dropped AR$ 200 by Wednesday following raids by Customs and Federal Police in caves in downtown Buenos Aires to discourage informal transactions. Raids were also carried out in caves in the exclusive Nordelta area, northwest of the Argentine capital.

In addition, Massa announced a new export incentive program (PIE) open to the whole Argentine exporting complex for 30 days, whereby traders would settle part of their sales abroad at rates above the official AR$ 350 quotation which is expected to shore up the Central Bank’s reserves.

In this scenario, Milei has insisted he would dollarize Argentina’s economy if elected.