Hello. Must be tired of a weak rupee. Well, Argentina peso is traded for 1,250 per US dollar
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Inflation in the South American nation is over 200pc
LAHORE/BUENOS AIRES (Web Desk/Reuters) – We have seen enough of rupee devaluation which pushed Pakistan into a quagmire where inflation has created an unprecedented cost of living crisis and left millions poorer. The rest was achieved by monetary tightening – high interest rates – aimed at control the prices, but has crippled the economy.
Now just check Argentina where, Reuters says, black market peso exchange rate weakened a sharp 5.6 per cent on Wednesday to a record low of 1,250 per dollar, with its gap to the official rate widening above 50pc, underscoring renewed pressure on the embattled currency.
Read more: Dollar pull effect: How a weaker currency makes you hostage to dollar
The South American country is battling inflation over 200pc, which saps savings and makes peso assets less attractive. The official peso exchange rate near 819 pesos per dollar, devalued sharply last month, is propped up by strict capital controls.
Analysts said that a crawling peg that sees the peso weakened officially some 2pc each month was not enough to keep up with the high inflation, causing the exchange rate gap to widen, even if remains far narrower than before December's devaluation.
A move to allow importers to settle newly-issued Bopreal bonds via parallel currency markets to access foreign currency also put pressure on the peso, traders said.
Argentina's new libertarian President Javier Milei, currently in Davos, is battling to fix the country's worst economic crisis in decades, with triple digit inflation, foreign currency reserves running dry and a looming recession.
The grains producing country has had multiple parallel exchange rates since 2019 when currency controls were imposed to try to halt a flight from the peso and preserve the supply of dollars. The gap has been as wide as 200pc in the last year.
