Blue Dollar soars to record high as New Year draws closer

Argentina’s currency plunged on Wednesday on the parallel market, with the ‘blue’ dollar hitting a record high of 209 pesos, marking a 103 percent gap with the official exchange rate of 108.16 per greenback

The blue dollar has risen from 199 to 209 pesos per dollar over the past week, pressured by liquidity due to the payment of Christmas bonuses and inflationary expectations in a year that will close with an consumer price index of above 45 percent. It began the year at 165 pesos per greenback.

The informal market has a low trading volume but functions as a sensitive indicator of expectations.

Argentina has had exchange rate controls in place since 2019 and is  in the midst of negotiations with the International Monetary Fund in search of an extended fund facility  programme to replace the stand-by agreement signed in 2018 for which it owes some US$44 billion.

If a new agreement is not reached, Argentina faces maturities of around US$19 billion in 2022 and another  US$19 billion in 2023, plus US$5 billion more in 2024.

Gross international monetary reserves stand at about US$39 billion, but analysts estimate that net reserves are less than US$5 billion. ​

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