2023-08-17 09:59:05
She was eagerly awaited. The devaluation that had been looming in Argentina for weeks, if not months, was announced Monday, August 14, the day after the presidential primary elections, marked by a spectacular breakthrough by the ultraliberal candidate Javier Milei. After the adjustment made by the central bank, the peso thus lost 18% of its value. This is the largest devaluation of the official rate in one day since 2019.
Read also: Article reserved for our subscribers Argentina is desperately looking for dollars
Until now, the government of Alberto Fernandez (center left) had chosen the strategy of regular microdevaluations, in order to avoid the corollary of a sudden loss of value of the currency, namely a sudden surge in prices. The country does not need it: it already has to deal with one of the highest inflations in the world, and the highest in thirty years (113% over one year). However, the official exchange rate, whose value is artificially boosted by a series of exchange controls, became untenable. The gap with the parallel rate – the “fair” value used by economic players to draw up quotes or set out largely dollarized prices, in particular – continued to widen.
Net foreign exchange reserves in the red (they oscillate between -8 billion dollars, i.e. -7.3 billion euros and -10 billion dollars, according to the assessment of private firms, the central bank not communicating its net reserves) and constantly falling no longer allowed to maintain the previous value of the peso afloat. Consequence of the devaluation: a great excitement on the parallel market, where the value of the currency plummeted. Wednesday August 16, 1 dollar was exchanged against 775 pesos. A record.
“People don’t want to buy”
These variations are not limited to financial transactions. They also affect the daily life of Argentines. « Roast-beef », “minced meat”, ” calf ” : Wednesday, August 16, in the window of a butcher’s shop in the capital, Buenos Aires, the large boards with chalk inscriptions clearly display the pieces of meat and the symbol of the peso, but the prices are not given. Same absence of reference inside the trade, where the pieces are presented without signs.
” Since Monday [14 août], the prices are only going up. I prefer to wait for it to stabilize before registering them”, explains Ruben Quiroga, the owner. Arms crossed on his white apron, he waits for customers. ” It is quiet. People don’t want to buy. Suppliers have increased me by about 40% since Monday. I’m left with no choice: take it or leave it! » A customer eventually walks in and inquires about the value of 1 kilo of minced meat. « 3 000 pesos [7,90 euros au taux officiel, deux fois moins au taux parallèle]breathes the butcher. I know, it’s madness. » The kilo was worth 2,000 pesos, four days earlier.
You have 42.84% of this article left to read. The following is for subscribers only.
#primary #elections #devaluation #drives #prices