Argentina’s economic misery continues as the country’s currency faces future devaluation. The government has been introducing a number of mechanisms attempting to relieve the county of forthcoming pressures. In its latest endeavor to safeguard its currency, Argentine taxpayers have been restricted as to the amount of US dollars they can acquire.
Argentina, one of LATAM’s most populous nations, has been plagued by economic uncertainty since the turn of the century. Fuelled by a spree of recessions, the peso suffered its largest single-day drop earlier this year when the government devalued the currency, which then hit a 12-year low dropping 12%. Argentina had suffered a major debt-ridden backlash in 2002 after reaching a $95 billion default.
In its latest act of salvage, the government has put a cap on the number of people who can purchase dollars. The government has increased the amount that residents earn before they can purchase and hold dollars. To purchase $2,000, a resident must earn at least $1,046 a month.
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Among its economic concerns are rising inflation and declining employment, but of major concern is the country’s reserve holdings. The dim environment has capitulated into a 30% drop in the value of Argentina’s international reserves.
The greenback is currently trading at 8.41 against the Argentinian peso.
The devaluation of the currency introduced in January this year has resulted in a new ‘over-the-counter black market’ for FX transactions. Argentinians are trading in international currencies outside the mainstream processes in a bid to weather the meaningless returns on dollar-peso transactions.