Argentina Exchange Rate

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Argentina: Blue dollar depreciates to a record low following debt default

September 15, 2014

The black-market peso—the so-called “blue dollar”—depreciated notably in recent weeks following the country’s default on its debt on 30 July and the government’s efforts to circumvent U.S. District Judge Thomas Griesa’s ruling that the country must fulfill payment to both regular creditors and holdouts at the same time. On 15 September, the blue dollar traded at 14.30 ARS per USD, which was 8.3% weaker than on the same day last month and marked the lowest value of the parallel peso against the USD on record. On an annual basis, the blue dollar has lost half of its value, weakening 54.0%.

The official peso retreated slightly, weakening 1.6% month-on-month to 8.40 ARS per USD. On a year-on-year basis, the peso dropped 46.8%. The sharp annual decline mostly reflects the Central Bank’s decision to scale back foreign-exchange intervention earlier this year in order to preserve dwindling international reserves. Foreign exchange reserves are of vital importance to Argentina; the country relies on the reserves to pay for imports and to honor its debt obligations.

LatinFocus Consensus Forecast panelists expect a sizeable devaluation of the official exchange rate in the years to come. They see the official exchange rate ending this year at 9.43 ARS per USD. Next year, the panel sees the peso depreciating even further than it already has, to 12.19 ARS per USD. LatinFocus Consensus Forecast panelists project a non-official exchange rate of 12.73 ARS per USD at the end of this year. In 2015, the panel sees the blue dollar depreciating to 15.13 ARS per USD.


Author: Ricard Torné, Head of Economic Research

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Argentina Exchange Rate September 2014

Note: Daily international reserves (USD bn) and daily spot exchange rate of official and non-official Argentinean peso (ARS) against U.S. dollar (USD).
Source: Argentinean Central Bank and Thomson Reuters.


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