Argentina woke up yesterday with a new elected president, Javier Milei, who, among his main proposals, seeks the dollarization of the country. If this happens, The country would have a fixed or fluctuating exchange rate.
But, at the moment, the above contrasts with the current reality of Argentina, since it is a country that, due to its economic crisis and in this case the devaluation of its peso, It has come to have more than 30 types of quotes for the dollar; Today there are more than 16 options. According to Bloomberg, This year the Argentine peso has been the weakest currency and will lose 70% in value next year.
“In Argentina there is not a single dollar. We have the official dollar, which is where export and import transactions are made, that is an exchange rate in which the central bank has the power to move it based on the monetary or exchange policy decision it decides to make, and which ends up being a reference type. From there, a series of multiple exchange rates begins depending on the activity carried out by the person operating the dollar.“explained Julián Yosovith, financial analyst and professor of the master’s degree in Finance at Utdt.
So, in this case, the popular saying applies that for the tastes and needs, there are the colors, in this case, there is a dollar for everything.
The types of dollar quotes in Argentina are divided by several segments. There is the official dollar, the blue, the financial, the card and the one available by economic sectors. Inflation, scarcity of reserves and the logic of supply and demand would be the reasons for the proliferation of dollar exchange rates in the country.
types of dollars
To begin with, in Argentina, as in other economies, the official dollar operates. This refers to the price of the US dollar in official exchange houses and banks authorized to operate in the country. Single and Free Exchange Market (Mucl) by the Central Bank of the Argentine Republic (Bcra), according to the media El Cronista.
Then, there is the retail and wholesale dollar, the first is the value stimulated by banks to sell foreign currency to their clients and The second is a type of quote that is established in the official market.
There is also the blue dollar, which is the best known among savers and It is the type of exchange that can be accessed through the informal circuit.
The MEP/Stock Market dollar is the exchange rate resulting from a purchase in pesos and its subsequent sale in dollars through the purchase and sale of bonds. While the dollar Cash with Liquidation (CCL is a legal operation to obtain dollars abroad.
There is also what would be the cheapest option on the market to access foreign currency in Argentina. This is the solidarity dollar, which consists of the sum of the price of the official dollar plus “Country” tax plus withholdings in advance of Earnings.
For leisure, there is also a type of dollar; There is the “Netflix”, the “Coldplay” or the “tourist”, in which it is sought that those who travel or buy abroad pay a dollar price that exceeds the official one. The card or tourist dollar arises from applying a tax established by the National Government; while more specifically Coldplay It is aimed at cultural services contracted abroad, which allows show producers to meet their commitments with a different price. Along the same lines is the Netflix dollar, the one corresponding to the payment of streaming platforms. The “luxury dollar” also appears here for purchases of luxury goods abroad.
Other options include the “crypto dollar”, aimed at maintaining savings through cryptocurrencies, and agriculture, specifically oriented for the agricultural producer.
If Milei fulfills its mission of dollarizing Argentina, there would be a unification for the exchange rate and taxes for the purchase of foreign currency would be eliminated, as indicated by Sebastián Domínguez, CEO of Sdca Asesores Tributarios.
This is Milei’s commitment to dollarize
Milei’s dollarization project is still in force, despite the moderating tone he used in his speech when he won the presidency. His economic advisor Emilio Ocampo ratified the plan this Tuesday. “It is what has the best chance of success. We tried everything else and it didn’t work.”, he said in a conference at the seminar organized by the Marval O’Farrel Mairal law firm in Buenos Aires. The economist estimated the size of the entire monetary base in Argentina at “barely” US$7.5 billion.