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Blue Blues



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Desperate to stop the flow of dollars out of the country, the Argentine government has been introducing ever tougher currency controls, both de facto and de jure. The ‘official’ rate is now roughly 5.20 to the US dollar, but the market rate (which is, of course, a function both of real economic conditions in the country—notably the genuine inflation rate (the official data bear little resemblance to reality)—and the artificial shortage of privately obtainable dollars within Argentina) tells a very different story. An acquaintance of Argentine descent told me that he was getting rather more than 8 pesos to the buck from distinctly unofficial traders on Buenos Aires’s Calle Florida (a major shopping street) in the course of a recent trip to the city a week or so back.

Over on Twitter, Pawel Morski points to Dolar Blue, a site that shows an even better ’blue’ rate (if you have dollars to sell) “in the city of Buenos Aires”.  Markets of this type are profoundly dysfunctional . There will not be one single dollar/peso rate (or anything like it), and both the source of Dolar Blue’s data and its accuracy are unverifiable. Nevertheless, if it bears any connection to the truth, the trend it is showing ($1 = 8.63 pesos on April 23, $1 = 9.60 pesos today) suggests that Argentina may be heading into very dangerous territory indeed.



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