According to the Financial Times, “Argentines are turning to the blue dollar as the crisis deepens”

Share This Post

- Advertisement -

For the Financial Times,

- Advertisement -

“Confidence in the Argentine economy is evaporating,” says the Financial Times of the local crisis.

- Advertisement -

“Confidence in the Argentine economy is evaporating as the government fights domestic politics, a growing internal debt and inflation has reached 90% “. The opening paragraph of the large note published this Monday by the Financial Times talks about the crisis Argentina is going through.

The British newspaper already titled describes the trade situation in the country: “Argentines turn to the black market for dollars as the crisis worsens”. The publication describes why people are turning to the blue dollar amid the escalation of exchange rates and the soaring expectation of inflation that would exceed 8% by July.

The dollar rose to new highs on the black market as Argentines, limited to buying $ 200 a month, rush to the money changers to dump their rapidly depreciating pesos. On Fridays, dollars were sold on the streets of Buenos Aires for $ 337, 15% more in a single week.

“The rapid deterioration of confidence and the growing difficulties of the government to finance itself raise fears of a total economic crisis, similar to those that have periodically devastated the South American cereal exporter in the last half century”, assures the specialized newspaper.

The FT supports its description subject to what the market itself says – for example, Citi warned it this month “The risk of an acceleration in the rate of deterioration of the Argentine economy is significant”.

Or what a Portfolio Personal Inversiones broker said: “The gap between the black market dollar and the official dollar has widened to over 150%, a level last seen during Argentina’s 1989-1990 hyperinflation. “.

In another of its paragraphs, the British publication points out that “Argentina has been largely isolated from international debt markets” since its default in 2020, and explains that in the face of this situation “the government finances itself through the press. of money and internal debt, “most of which is linked to inflation and carries higher and higher interest rates.

Financial Times

Financial Times

In this context, the daily warns that, although President Alberto Fernández has ruled out the prospect of a timely devaluation, “Many Argentines and economists fear that the economy will get worse long before it gets better.”

“Dollar sales are crazier than ever,” Adán, 28, a small tree operating in downtown Buenos Aires who also preferred not to give his full name, told the Financial Times. “The only thing customers don’t want to keep are pesos. . . many ask questions about what will happen next ”.

The FT also details in its note that “the abrupt resignation of the Minister of Economy, Martín Guzmán, on July 2, followed months of controversy within the ruling Peronist coalition. Concerns about the capacity of the weak and unpopular Fernández government to deal with the rapidly deteriorating situation.

“I decided to make a big purchase that I had postponed because I knew the markets would go crazy when the minister resigned,” said Paige Nichols, a 35-year-old marketing consultant, while shopping in Buenos Aires.

“Guzmán left just three months after negotiating a $ 44 billion debt restructuring deal with the IMF. But his promises to bring the budget deficit under control were strongly rejected by the powerful Vice President Cristina Fernández de Kirchner and his radical allies. Kirchner believes that Peronists should spend more to protect voters from rising inflation ahead of the 2023 presidential race, “describes the Financial Times.

In this sense, the publication warns that “despite Guzmán’s premature departure, IMF officials believe that the economic objectives agreed by the fund with Argentina can still be achieved by his successor, Silvina Batakis, if he acts quickly”. And in that same line. clarifies that “Kristalina Georgieva, managing director of the IMF, said that Batakis understood ‘the purpose of fiscal discipline’ and described a first ‘excellent’ call with the minister”.

“No measures will be effective until it becomes clear that Vice President Cristina and her group will not sabotage Batakis,” the political risk group Eurasia told the FT in a statement.

“In addition to the deterioration of the economy, there is Argentina’s conflicting politics before next year’s elections, which the Peronists risk losing,” warns on the end of the note in the Financial Times.

YN

Source: Clarin

- Advertisement -

Related Posts