November 23, 2014
‘Blue’ hits second record in two days
The black market exchange rate broke a record for the second time in as many days yesterday, closing at 11.55 pesos to the dollar.
The offical peso exchange rate also hit record levels, falling 0.26 percent in value to close at a historic low of 6.775 pesos per dollar, thus widening the gap between the two rates to 70.5 percent.
Yesterday’s trading price signified a 34-cent increase from the record set the day before of 11.21 pesos.
Traders explained the records as due to high demand from several sectors.
This included Argentine tourists looking to buy dollars for their overseas holidays and avoid paying more for the sought-after foreign currency in the future, as well as local savers attempting to bypass foreign currency controls and counteract the impact of inflation on their savings.
Stocks in the Buenos Aires exchange rose yesterday as investors sought refuge from the depreciating peso.
The Merval benchmark stock index increased 2.56 percent to reach a new record of 5,833.21 points.
Yesterday’s implied price for dollarized bonds grew 7.5 percent to reach the 10.75-peso mark.
The black market has seen an additional 75 cents added to its rates for dollar since the start of the year, representing a 13.1 percent rise in January, while the official peso has seen a 3.8 percent decrease in value over the same period.
The Central Bank reportedly sold US$50 million in reserves to give liquidity to the market and mitigate the depreciation of the peso. Traders also reported that Banco Nación and Banco Provincia, both of which are public entities, were also participating yesterday in the currency exchange market.
The trend in the value of the peso — which has seen ongoing devaluation since Juan Carlos Fábrega took the helm of the Central Bank — is expected to continue throughout 2014.
Former Central Bank Governor Aldo Pignanelli considered that the value of the black market currency will keep rising, because it “will accompany inflation.”
— Herald with Reuters, online media