The IMF and USA money is keeping this anti-free market exchange rate going. People can argue if it is manipulated or not but it is and prices will stay out of control if this keeps up.
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If the Argentina peso is truly overvalued
- Thread starter TonyTigre
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Good Stuff
Member
Yes, you need a local id. Yes, they take a cut, even with fee you get a good rate.
The peso was $1 = 1 peso for 10 years. It was not sustainable and things eventually crashed. Prices can stay irrational for a long time.
I tried but they asked for a local DNI #. My friend with DNI tried it @Good Stuff thanks to your post. He said that they charge $3 to make a wire transfer but it got credited asap. Just like you said the exchange rate was good but you need a local ID.
Finance Prof
Well-known member
We will see how they do coming up. After the payment to bondholders, Argentina still has debt maturities of almost $9 Billion in 2026. In 2027 about $22.615 Billion, 2028 $18.583 Billion, 2029 $20.850 billion USD.
About right. I bought bitcoin in 2021 around $68,500. I have held on but it has been a terrible investment compared to what I could have just made in the stock market. It is barely hanging on to 83,000 now. I wish I sold it all at the high a few months ago.
Cellular Shill
Member
At least Argentina is finally building up USD reserves.
en.mercopress.com
Argentina’s central bank extends dollar-buying streak, pushing reserves to a Milei-era high
Argentina’s central bank (BCRA) posted another net purchase in the foreign-exchange market on Thursday, buying US$52 million and logging a 19-session streak of net buying, according to figures reported by local media. Over that run, the bank accumulated US$1.134 billion, while gross reserves...
Finance Prof
Well-known member
Of course the exchange rate is manipulated. Without all of these bail outs what do you think it would be trading at?
Argentina Bought $808 Million from US to Pay IMF, La Nacion Says
Rescue package after rescue package. As long as they keep coming.
Cellular Shill
Member
Without the bail outs obviously it would be a much different picture. Just how bad it would be is anyone's guess. But it was expensive like this and not sustainable before the big crash. Probably the same thing will happen.
Blockchain
Well-known member
For all of you on the ground there in BA, how long can the government keep up this charade of the exchange rate? Anyone I speak to now tells me salaries aren't matching inflation and their bills have jumped up many multiples of what they were paying. They were excited after Milei started but each passing month they seem to have less hope. How long can it be like this?
Wally
Well-known member
Just remember it can last much longer than you would think. We had a decade stretch before where it was $1 to 1 peso. That wasn't realistic and it still lasted a decade. Now you have the USA leading tens of billions of dollars to fund with the IMF and another $20 billion for swap. All things that didn't seem realistic in the past. These things can allow the peso to be overvalued for a long time.
Wally is correct. The thing dooming Argentines is they have no basic concept of finances. I am always surprised about how little they know and even more surprised they will continue letting Presidents steal from them. They know there is no alternative to find an honest politician. People say the K's were corrupt. But so are the Milei's. People say but Cristina was way worse. My answer would be, give Milei and his sister enough time and they will reach those levels too. They aren't much different. Both sides lock in and say their side is right.
Look at the things Milei is doing now. Lying about inflation numbers with INDEC. That is from Cristina's playbook so anyone that says that this time will be different are probably wrong.
The worst thing is they are blatantly lying to our faces and stupid enough to think we don't know better. Inflation is going back up. Expenses are going up, utility bills are sky-high, grocery prices are shooting back up. And you still think things will end up well this time?
Not likely.
Look at the things Milei is doing now. Lying about inflation numbers with INDEC. That is from Cristina's playbook so anyone that says that this time will be different are probably wrong.
The worst thing is they are blatantly lying to our faces and stupid enough to think we don't know better. Inflation is going back up. Expenses are going up, utility bills are sky-high, grocery prices are shooting back up. And you still think things will end up well this time?
Not likely.
Agree with you Ben that it's most likely that we will see another crash. I don't think the question is if. Just when. But like the others said, it can last for years and it depends on how much more help they get from the USA. But anyone that thinks things are normal or the peso is worth what it is trading for is delusional. Without the USA's massive help and the roller of debt constantly the peso is doomed long term.
Look at the prices of beef. Skyrocketing. And now they will be exporting to the USA. Prices will go up even more.
They are doing the same thing as during Kirchner times lying about the numbers. IMF can't be happy about that. Milei is losing all credibility. Inflation is much higher than what they are saying.
Piranha
Well-known member
I am no expert on Argentina. And don't claim to be. I do hear alot of people saying this time is different. Like most things the truth is probably somewhere in the middle.
Argentina has a mountain of debt. No one can argue with that. They will constantly need a solution to roll over that debt. They need time and money. No doubt the $20 swap with the USA was desperately needed but they only activated less than $2 billion of that debt and it was already paid back. Bessent and Trump most likely never intended to use the entire $20 billion but they used that threat so that people wouldn't short the peso.
It is working for now. The Central bank is building up their reserves like they should have done a while ago. They are trying to get more people to bring dollars from under the mattress and use that cash. They have also adjusted interest rates which also prevents further speculation.
People say this time is different because they have a fiscal surplus and cut spending down drastically.
Argentina has a mountain of debt. No one can argue with that. They will constantly need a solution to roll over that debt. They need time and money. No doubt the $20 swap with the USA was desperately needed but they only activated less than $2 billion of that debt and it was already paid back. Bessent and Trump most likely never intended to use the entire $20 billion but they used that threat so that people wouldn't short the peso.
It is working for now. The Central bank is building up their reserves like they should have done a while ago. They are trying to get more people to bring dollars from under the mattress and use that cash. They have also adjusted interest rates which also prevents further speculation.
People say this time is different because they have a fiscal surplus and cut spending down drastically.
Totally agree. There is a LOT of debt that is due in 2026 and 2027. Some things the government will need to have good luck with commodities prices, favorable debt rollover, etc. Expats right now are on the losing end of the equation with Milei. Sure he may be helping the country but if you have your savings in USD you're basically stuck with prices in USD terms increasing each month. This could last a long time depending on how much help the USA will give.
There are also hundreds of billions of USD under the mattress from locals. This is also getting killed by inflation and the government needs to get this working.
Remember the United States has another Presidential election in 2 years. If Republicans get voted out, it is going to spell bad news for Argentina. On one hand it is good they are very linked with the USA but the downside will be if Trump gets voted out and Republicans do poorly, this will also probably spell doom for Argentina in 2 years.
It could be the perfect storm for Argentina because locals patience is wearing thin, inflation is rearing its ugly head again and the economy in Argentina has hit a wall. Unemployment is rising, homelessness is rising (despite what Milei says) and salaries aren't keeping up with inflation.
Everything can change in 2 years or less.
Finance Prof
Well-known member
Some great posts. I also think Argentina is too dependent on the United States right now. Trump and Milei are best friends but that will be a tremendous liability for Milei even if he manages to stay in office and the Republicans take over They will use that friendship to punish Argentina and Milei.
I don't know how anyone can feel like things are going well here. The mood is dampening. The economy outside of a few pockets is terrible. Stores and restaurants are closing, inflation is on an upswing and going up, Milei is lying about true inflation numbers, job losses are very high, prices are totally crazy for local wage levels. What do you think would happen without the IMF and USA's swap help?
The INDEC thing is a real sign how poorly things are going if they have to go to that level. There is support in the peso because of the $20 billion swap line which is assumed if things go south they can tap into. That is going to cause a floor for the peso. It is doing it's job of keeping people shorting the peso or trying to speculate against it away.
No one should believe anything now from the government. The inflation numbers are a lie. I don't even trust the Central Bank. How anyone can believe that the peso is truly valued at these levels is beyond me. This is not organic. It's all manufactured.
Look at the price of things, utilities, beef, dining out. Exploding up. My condo fee each month continues to go up. The government had to work with banks for people to get loans to pay their condo bills. That is not natural and I have never seen that in Argentina before.
I like Argentina no matter what is going on and own an apartment here and spend 6 months out of the year here. Things here can stay expensive for a while and probably why many have left.
For all of this talk about things here improving I don't see it. Besides being able to order a few things online a little cheaper, everything is still broken here. Now the government has resorted to lying like Cristina did. Put a fork in this..it is eventually going to be done.
I don't know how anyone can feel like things are going well here. The mood is dampening. The economy outside of a few pockets is terrible. Stores and restaurants are closing, inflation is on an upswing and going up, Milei is lying about true inflation numbers, job losses are very high, prices are totally crazy for local wage levels. What do you think would happen without the IMF and USA's swap help?
The INDEC thing is a real sign how poorly things are going if they have to go to that level. There is support in the peso because of the $20 billion swap line which is assumed if things go south they can tap into. That is going to cause a floor for the peso. It is doing it's job of keeping people shorting the peso or trying to speculate against it away.
No one should believe anything now from the government. The inflation numbers are a lie. I don't even trust the Central Bank. How anyone can believe that the peso is truly valued at these levels is beyond me. This is not organic. It's all manufactured.
Look at the price of things, utilities, beef, dining out. Exploding up. My condo fee each month continues to go up. The government had to work with banks for people to get loans to pay their condo bills. That is not natural and I have never seen that in Argentina before.
I like Argentina no matter what is going on and own an apartment here and spend 6 months out of the year here. Things here can stay expensive for a while and probably why many have left.
For all of this talk about things here improving I don't see it. Besides being able to order a few things online a little cheaper, everything is still broken here. Now the government has resorted to lying like Cristina did. Put a fork in this..it is eventually going to be done.
lemonade
Well-known member
The central bank might be building reserves but is anyone really seeing the benefits at all? Things seem to have gone from bad to worse besides some products coming in. I don't buy the argument that inflation has slowed down. Sure on many things like at supermarket and some other things but for the everyday person everything is much more than Milei started. And I'm not talking just a little. Electricity is up 4X, same as gas and water seems much more too. I don't pay the monthly HOA fees but I can see it in the mail as it's slipped under my door in my rental and it keeps going up too.
@Johnny posted his monthly apartment dues and just in the past year they skyrocketed. Gas is more too. Restaurants have become unaffordable. So how is the typical person benefitting? Was it like this too when the peso was $1:1? I wasn't here then. How was it then?
GlasgowJohn
Well-known member
That sums it up fairly well
Avocado
Well-known member
No this is NOT like before the corralito. Back then life was very good. I remember traveling all over the world. We made great incomes and cost of living for us was reasonable. This not like today. Now everything expensive and salaries are very low.
No one have money to spend. Look at tuition rate. Expensive! Everyone was better off when it was $1 to 1. Far from it today. Things are terrible now!
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