The Argentine peso collapses

Question

The Argentine peso collapses

Answer 1

The Argentine government has repeated ad nauseam will not approve measures peso devaluation because, according to the president herself, Cristina Fernández, the measure makes the poor poorer and wealthier speculators. However, between Wednesday and Thursday there has been a depreciation of the peso in the official market as not seen since 2002.

On Wednesday morning you could buy a dollar at the official market by 6.89 pesos. In the afternoon and 7.13 pesos needed for a dollar. The Central Bank on Wednesday declined to intervene, let the market run its own dynamics. But on Thursday, the national currency lost as much as 12 % of its value over the previous day, crossed the barrier of eight dollars in exchange for a dollar and the Central Bank had to sell a few hundred million dollars from his book to avoid continue to depreciate the peso. The problem is that the reserves of the Central Bank several weeks down the barrier of 30,000 million and are at their lowest level for seven years ago.

The chief of staff of the Argentine Government, Jorge Capitanich, insisted that all due to market movements and dismissed all responsibility to the Executive. "There has been a devaluation -induced state, but the free offer of demand that was expressed yesterday in the market," he said. Meanwhile, black, or blue dollar, known in Argentina as the currency on the parallel market, on Wednesday for the first time exceeded the value of 12 pesos per dollar on Thursday and arrived at 13.

The president, Cristina Fernandez, reappeared Wednesday in a public ceremony at Government House after 34 days of silence. But he made no mention of the peso devaluation. Fernández presented a plan for economic assistance to 1.5 million young people between 18 and 24 who neither study nor work. The plan is to give them 600 pesos per month (equivalent to $ 86 in the official market and 50 in parallel). The program was considered positive even among the most critical press. But the silence on the peso devaluation garnered much criticism.