As the informal “blue dollar” exchange rate reached a record-high value of AR$527, the government raided Buenos Aires city’s cuevas —Spanish for “caves,” as informal currency exchange houses are popularly known. According to a survey made by Ámbito Financiero, the informal exchange rate saw a AR$5 in one day and ended at AR$525, meaning that the gap with the official exchange rate hit 95.24%. Conversely, the MEP exchange rate — a market in which the government strongly intervenes — is at AR$494.5. As US dollars at the official exchange rate are increasingly less available for local companies due to the international reserve crisis, surges in parallel exchange rates have a greater impact on the inflation rate and feed devaluation expectations. The companies allegedly engaged in arbitrage by charging for inexistent imports at the official foreign exchange rate which, according to Customs, lead to an estimated loss of “at least” US$5.5 million.

Source: Bueno Aires Herald July 20, 2023 03:00 UTC