According to news site El Cronista, the strict controls on the exchange rate market has made the dollar/pesos exchange to soar. The Argentinian government hasn’t made much to lower short-term pressures. In the parallel market, the dollar is trading at $ 5.82 pesos, 30% more than the official rate. Many businesses are using these values ​​to operate.

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In the midst of the prohibition of Argentines to buy dollars on the official exchange market, prices in the parallel FX market is heating up. Trading skyrocketed from $ 5.18 last Friday to the current $ 5.28 yesterday, ten cents in one single day. At the same time, the value used by investors to get dollars through the sale of bonds or shares without going through a formal conversion process rose strongly to $ 5,82 from $ 5.60 last week.

The widening gap emerging between the official and parallel exchange rates is a formal evidence that foreign exchange restrictions are getting tougher. The official screens of exchange currency houses and banks show the dollar price to be at $4.465 (for those who are lucky enough to be approved by the AFIP). But compared with the parallel market, the gap shows a difference of $1.35, or 30%. That is, depositors, businesses and investors are accepting to pay huge premiums to buy dollars. And expectations point to a deepening of the trend.”

Source: El Cronista

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