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Currency Controls

Currency Controls

Old Jul 4, 22, 10:19 am
  #106  
 
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Spread now 270 - 280. Ouch!

Cronista, the business newspaper is reporting 270-280 spread, with the departure of Martín Guzmán.
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Old Jul 4, 22, 10:48 am
  #107  
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Originally Posted by spainflyer View Post
Cronista, the business newspaper is reporting 270-280 spread, with the departure of Martín Guzmán.
It is flying all over the place today. Ambito was showing a buy/sell spread of 30+ earlier today with a sell pesos at $280. Now it is 20. (248/268). I expect it will calm down somewhat as the week progresses.
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Old Jul 4, 22, 11:31 am
  #108  
 
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Are the cuevas even open today? It seems like with so much volatility someone has to get burned. Even 2% is a significant movement, and the dólar blue has moved 10% and the contado con liqui 12%. A good narration of hour-by-hour fixings at Cronista:https://www.cronista.com/finanzas-me...ion-cambiaria/
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Old Jul 12, 22, 5:38 am
  #109  
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Cuevas are open 7 days a week - trading on non financial market days (ie. holidays and weekends) will usually mean you have to absorb a higher spread (rates will be less competitive), but you will certainly be able to trade your hard currency for Pesos.
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Old Jul 12, 22, 5:42 am
  #110  
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Originally Posted by Flying Machine View Post
I really liked the work of Martin Guzman. Critical times lie ahead: https://www.ambito.com/finanzas/dola...rcado-n5477137
The reason Argentina has been in "critical times" is because of the likes of Martin Guzman and his "national & popular" Peronist (K)orrupt gang of thugs. Nothing at all to be liked about Mr Guzman...... sadly, nothing is going to change for the better until this "government" gets ejected from office (or so I hope) come the next elections.
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Old Jul 12, 22, 1:54 pm
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Originally Posted by Gaucho100K View Post
The reason Argentina has been in "critical times" is because of the likes of Martin Guzman and his "national & popular" Peronist (K)orrupt gang of thugs. Nothing at all to be liked about Mr Guzman...... sadly, nothing is going to change for the better until this "government" gets ejected from office (or so I hope) come the next elections.
Without getting into politics. Martin Guzmán is a very educated and accomplished man (PhD Economics Brown University) was a protégé of the very well renowned economist Joseph Stiglitz,
He was a researcher at the Columbia University School of Business and Director of the Public Debt Restructuring Program of the Policy Dialogue Initiative of the same School.

In fact you have to give him credit for the restructuring work with the IMF, private investors and the Paris Club.
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Old Jul 16, 22, 10:21 am
  #112  
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Well, the worst now anyone has to worry about with a taxi scam is well under US$4. We are getting back to the "Sir, are you happy to see me, or is that just the money you'll need to pay for dinner in your pocket" department. I'll be curious to see the price of the "run of the mill empanada" in a month. That's my first point of reference for inflation v currency devaluation.

This year so far has been an excellent opportunity for tourists.
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Old Jul 17, 22, 1:10 pm
  #113  
 
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Cost update

Originally Posted by Eastbay1K View Post
Well, the worst now anyone has to worry about with a taxi scam is well under US$4. We are getting back to the "Sir, are you happy to see me, or is that just the money you'll need to pay for dinner in your pocket" department. I'll be curious to see the price of the "run of the mill empanada" in a month. That's my first point of reference for inflation v currency devaluation.

This year so far has been an excellent opportunity for tourists.
We've left BA, so no empanada $ updates from me. However, husband was going thru photos, and has a pic of when we first arrived. I think it was at Sasha?, and the piece of cake was 400 pesos end of Feb. When we left beginning of July, that same piece was 800 pesos.
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Old Jul 20, 22, 1:56 pm
  #114  
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WU is at $300 today, for those interested in WU transfers.
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Old Jul 21, 22, 1:06 am
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The brown is hitting the fan. Again. DolarSí is still quoting a 302-307 spread, but Cronista has moved the needle to 312-317. This disparity implies a lot of chaos and even more uncertainty in the market, as normally the Dolar Blue fixing is arrived at by consensus among major cuevas and the Microcentro.
On a related matter, can Gaucho 100K or anyone else quote an up-to-date price for a dinner (bife de chorizo, papas fritas, ensalada verde, panqueque de manzana, medio litro de Malbec) at a good but not outrageous Bs As restaurant? All menus posted on Google Images are out of date almost as soon as they are printed...
Seems like now we can't afford not to visit Argentina!
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Old Jul 21, 22, 9:19 am
  #116  
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Originally Posted by spainflyer View Post
The brown is hitting the fan. Again. DolarSí is still quoting a 302-307 spread, but Cronista has moved the needle to 312-317. This disparity implies a lot of chaos and even more uncertainty in the market, as normally the Dolar Blue fixing is arrived at by consensus among major cuevas and the Microcentro.
On a related matter, can Gaucho 100K or anyone else quote an up-to-date price for a dinner (bife de chorizo, papas fritas, ensalada verde, panqueque de manzana, medio litro de Malbec) at a good but not outrageous Bs As restaurant? All menus posted on Google Images are out of date almost as soon as they are printed...
Seems like now we can't afford not to visit Argentina!
Not to be too obvious, but any FT post would be out of date almost as soon as it is posted.
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Old Jul 21, 22, 12:24 pm
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The spread is now 326-336 , but no one I know has changed at those rates

WU at 307·
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Old Jul 21, 22, 1:24 pm
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Interesting

The govt is going to allow foreign tourists to sell up to U$5.000 at the “blue” rate. Uruguay did something clever. You can get a Master Card prepaid card in dollars and as you use it they discount your peso purchases from the card at the CCL rate, which sometimes is even higher than the “Blue”.

The above is a message from a friend in BsAs

The story is developing does anyone on the ground have any other information?

Update from LA Nacion:

https://www.lanacion.com.ar/economia...l-nid21072022/

Last edited by Flying Machine; Jul 21, 22 at 3:12 pm
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Old Jul 21, 22, 3:11 pm
  #119  
 
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LA Nacion Article Translation

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

Last edited by Flying Machine; Jul 21, 22 at 3:21 pm
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Old Jul 21, 22, 3:21 pm
  #120  
 
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The big question is will the government get the system up and running and will the banks collaborate? The government failed miserably with their Special Account - not one was opened.
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