The unofficial exchange rate hit 14 ARS/USD this afternoon, while the official rate remains a 8.39 ARS/USD. The gap between the two has widened to 5.61 pesos, or 66.87 percent of the official rate.
Yikes. Good thing I keep my money in an old boot in dollars.
Expect the government to take action to bring this rate down – fast. This will likely involve some combination of what we at The Bubble term Argentine monetary policy:
- Forcing state-owned agencies to sell dollar bonds locally
- Closing the cambios and other currency dealers for a few days
- Raising interbank lending rates, forcing banks to sell assets locally
The exchange market is now closed for the day, and a few minutes before 5 pm the so-called “blue dollar” dropped to 13.95 pesos.
Update 7:38 PM: While local news outlets report the market to have closed at 13.95 ARS/USD, sources within the industry state that at the mayorista (largest brokers) level the rate was 14.23 ARS/USD.
Stay tuned for further analysis as the story develops and the peso slide-slippity-slides.
This is a developing story.