Where can the “blue” dollar market get?

The dollar issue and its double exchange rate have become popular during the last few weeks in Argentina. The problem is that the “blue” (or parallel) dollar is becoming more popular than the official one. This is due to the fact that, even though the official dollar rate is lower than the parallel, not everyone can get them through those means.

During the last few weeks, the parallel dollar (i.e. bought in the black market) has been increasing its value, while the official rate has kept the same. This is because every day there is more people who buy in the black market than in the official one, (simply because they can’t do it in the latter).

Even tough the Government has been trying to go against the parallel market to stop it, this has made the situation to worsen. The cause is explained with simple economy: If you go against the black market, this creates financial anxiety, thus people want to buy more dollars, since they can’t do it on the official market, they do it in the black market; therefore, the “blue” dollar value goes up, and the government needs to reinforce its fight against the black market; and this becomes a vicious circle. As a consequence, the parallel dollar value continues to grow, and this could bring many negative effects on the Argentine economy.

So, it could be said that unless the government decides to make a reform officially and people become aware of the fact that this affect the economy, the parallel dollar value will continue to separate from the official one.

According to the latest news, the official dollar value is AR$4.49, and the parallel dollar value has reached the AR$5.92 and continues to grow. The difference between both has reached 27%. It is only a matter of time and actions that will make the situation to change, or just to stay the same.