Tourist dollar: how the new exchange rate and the ruse of the Government would work to avoid a bad drink - THE NATION
The Central Bank will launch in the coming hours, after its board meeting,
a new exchange rate in Argentina. It will be
for tourists who visit Argentina from abroad and have
two outstanding objectives: to allow the Government to redirect to a legal market currencies that until now were mostly illegal and lower the price of the dollar called MEP, which is obtained through an operation to buy and sell bonds on the stock exchange.
The new dollar for tourists
would work as follows, according to the clarifications that LA NACION obtained in the early afternoon, when several details had yet to be resolved. The tourist who approaches a bank will sell his dollars and receive pesos. If I did that operation today under the new modality, I would get exactly $330.23 at 14.04. It is 143% more than the $135.75 you would receive in the official market at the same time. In other words, it would be very convenient for you.
The Government will now try to
amend a mistake it had made in October last year. Overwhelmed by an adverse exchange rate situation, he put in place a mechanism for tourists arriving in the country
to open a local bank account where they were liquidated at the value of the MEP dollar. The proposal
was a failure, since almost no one made progress in opening those accounts.
The reading of the market is that it was much more cumbersome to come to the country for a handful of days and go to the bank to do the paperwork than to go to a small tree on Florida Street and change the tickets outside for a good price.
That's why
the operation would now
fall on the banks. The tourist who presents his entry passport to the country would sell his dollars and receive an amount of pesos. With the newly entered currencies, the financial institution would buy a dollar bond - for example, the AL30, although it is not yet defined - which it would then settle in pesos. That is,
the tourist would not be part of a gear that would fall on the side of the banks.
The financial world is discussing alternatives at this time to change systems and make the operation less cumbersome for banks. An alternative is for each entity to make an operation to buy and sell those bonds per day, adding up all the tourist operations that have been carried out. In this way,
the work of the money tables
would be
reduced.
The Government's measure is assimilated to a exchange rate split. It is a dangerous concept in economics, a discipline, it is known, in which it is very discouraged to have more than one price for a certain good. In this case, the dollar.
In Argentina, this practice brings bad memories to politics. For example, one of those who applied it is Celestino Rodrigo, Isabel Perón's well-known Minister of Economy. It was part of yesterday's and today's discussion between
Silvina Batakis and Miguel Pesce, president of the Central Bank.
Pesce's gaze prevailed, which exposed the evidence of the past: there are no successful examples of unfolding, since they all end in a sudden unification of the exchange rate. That is,
a devaluation.
The Central Bank gives as an example
the transition from Cristina Kirchner to Mauricio Macri. The new government unified the exchange rate, previously intervened, which increased. That year, inflation ended above 40%.
Although the tourist would put his dollars and receive pesos, it will not be an exchange transaction in practice. That is because behind that operation there is another one: the purchase and sale of securities, which is much more like a transaction on the stock exchange.
They are nearby, but different planets that will serve Alberto Fernández to deny, at least as long as the dollar storm allows it, the existence of a split.
The validity of the new tourist dollar will swing at a hypersensitive point for the Government. The MEP is one of the two major financial markets (the other is the cash with liquidation, to withdraw or bring dollars into the country). It has an impact on expectations. In other words, an increase in that price irrigates the belief that a devaluation will occur.
If tourists pour their dollars into the MEP instead of the
blue, they will increase the supply and, therefore, its price would decrease. In other words: the gap with the officer would narrow, one of the curses that weigh on the economy of Alberto Fernández and Cristina Kirchner.
There are, however, many doubts.
Penance could be in sin. Since tourists would turn their dollars to that market, the supply in the blue would be reduced. If that line followed the logic of the market, it would tend to rise, unless a shrinking gap contains it. These are things that will only be solved when the new system rolls.
There is also a simpler and more immediate uncertainty: why should a tourist sell his dollars in the bank when
a small tree pays him more, as is happening right now in the
city, where he trades at $336?
Hat Tip: Apple Translator