The dollar closed this Friday in Argentina 82.74 pesos in the official market, but traded at a record of 167 pesos in the parallel market, which brought the gap between the two to 101%, amid strong exchange restrictions.
The so-called ‘blue dollar’ that is sold in the parallel market traded at 17 pesos more than on Friday of last week in the financial center of Buenos Aires and at 36 pesos more than on September 15 when the Central Bank announced greater restrictions on the purchase of the US currency.
Accustomed to taking refuge in the dollar to cover themselves from the strong inflation, estimated at 40% for 2020, and for fear of recurrent devaluations, Argentines turn to the parallel market, a thermometer of economic expectations.
To stop the flight of foreign currency, Argentina has maintained a monthly purchase quota of $ 200 for savings since 2019. The greenback is purchased at the value of the official dollar plus a 30% tax.
In mid-September, the Central Bank applied a 35% withholding tax on these purchases of $ 200. This so-called ‘solidarity dollar’ traded this Friday at 136.52 pesos.
Those who receive subsidies from the State or the workers of companies that have been assisted in paying wages in the framework of the coronavirus pandemic cannot access the dollar.
“There are many pesos and a lot of uncertainty; with the devaluation expectation, people seek to cover themselves, and they cover where they leave it,” said Gabriel Caamaño, from the Ledesma consultancy.
Argentina’s gross international reserves stood at $ 41.092 billion as of Thursday, but analysts estimate that liquid reserves are around $ 5 billion.
Gross reserves have fallen by more than $ 11 billion in the last year, with the decline accelerating in recent months despite very tight exchange controls.