• The Argentine peso has lost almost 12% against the U.S. dollar since the start of 2021.
• Inflation rates in the country are predicted to reach almost 100% this year, similar to the rates experienced in 2022.
• The government has implemented measures to inject dollars into the market and maintain stability, but local analysts are worried about the balance of the country’s reserves.
The value of the Argentine peso against the U.S. dollar has been steadily declining since the start of 2021, losing almost 12% of its value in the exchange rate for the informal „blue“ dollar. This devaluation of the peso has caused concerns about a possible rise in inflation rates across the country, which are predicted to reach almost 100% this year, similar to the rates experienced in 2022.
The Argentine government has made moves to try and maintain the stability of the peso by injecting dollars into the market to satisfy the demand of registered importers. They have also announced a purchase operation of more than $1 billion of its own external debt. However, this has had the opposite effect, and now local analysts are worried about the balance of the country’s reserves.
The devaluation of the peso is already having an impact on the prices citizens have to pay for goods and services. The government has implemented a series of measures to limit the price rise of several products, however these are not expected to be enough to counteract the effects of the devaluation.
The implications of this depreciation of the peso are far-reaching and could have a major impact on the economic stability of the country. There are many factors, such as the balance of the country’s reserves and the ability of the central bank to maintain the stability of the currency, that could determine the future of the peso and the economic health of the country. It remains to be seen how the situation will develop over the coming months.