The serious difficulties of the National Government headed by Alberto Fernandez and the decision not to go deeper into an honest devaluation of the currency forced authorities to take measures and restrict access to the US currency, with the purpose of discouraging its acquisition. An accelerated annual inflation rate estimated at 100% and the need for foreign currency to strengthen the Central Bank of Argentina’s depleted reserves make the country’s economic outlook even more complex.
For the local or international investor, the uncertainty is generated by the enormous number of parallel dollar rates that exist in the exchange market. The official dollar moves at 6.5% a month and is almost on a par with inflation indices. Meanwhile, the Minister of Economy, Sergio Massa, continues with the implementation of the ‘dollar clamp’ to prevent access to the US currency (an unusual and expropriatory measure in the eyes of the world), with new quotes to try to control a demand that is much bigger than the supply. Of course, several exchange rates already existed before Massa’s arrival at the Treasury Palace, while others, such as the blue, the MEP or the ‘contado con liqui’ (blue chip swap rate), have surged without the imposition of the Government.
Among the different exchange rates that the Executive did set, there are some that came as measures to make the access of individuals and companies to dollars more expensive (Qatar, Coldplay, tourist, credit card, for savings). On the other hand, there were measures to encourage people to sell their own dollars (soya dollar or dollar from construction laundering) after authorization to bring in foreign currency held abroad (in the black market) in exchange for paying a percentage of tax or a fine. In this complicated framework, the economic team promoted a better exchange rate for some exports (such as the techno dollar) to encourage foreign currency liquidation and discourage imports. This has been affecting gambling companies, both for the import of products and services (for example, slot machines) and for international firms that reside in the country and want to send their profits in dollars to their headquarters.
At the beginning of November 2022, Government communicated new ‘dollar for foreigners’, which was added to the local exchange rate range. A few days later, it was announced that there would be a second part of the soya dollar for agricultural producers. So, today, in order to access the dollar in Argentina, it is necessary to analyze different exchange rates as a result of the aforementioned restrictions. We can count, in this way, at least seventeen different exchange rates.
DOLLAR EXCHANGE RATES IN FORCE TODAY IN ARGENTINA
1) Wholesale Dollar: also called “interbank dollar”, it is the one that handles the most relevant volume of operations and is traded in the Single and Free Exchange Market (MULC).
2) Retail Dollar: it is the reference rate in banks, although almost nobody can buy it at that value. The Central Bank reports a daily average of the quotations of all entities. Currently, a retail dollar is quoted at around $178.5.
3) Coldplay Dollar: also known as the “cultural dollar ”, this is the exchange rate for international shows that take place in the country. It is equivalent to the retail dollar plus 30% of the PAIS tax (tax for an Inclusive and Solidarity-based Argentina established in 2019 by President Fernandez, which taxes foreign currency purchase operations for hoarding with a 30% surplus and 9% on credit or debit card expenses).
4) Savings Dollar: it is based on the retail price plus taxes. Government authorizes the population to buy up to USD 200 per month, although, due to the multiple restrictions that it imposes, few Argentinians can access this dollar. To the retail price are added the 30% PAIS tax and 35% of earnings.
5) Netflix Dollar: it applies to all streaming platforms. It is 8% of the PAIS tax, but 21% VAT and 45% on account of Earnings have to be paid. This means a surcharge of 74% in relation to the retail dollar.
6) Blue Dollar: this comes from the purchase and sale of foreign currency on the parallel market. The price of the note on the street peaked at $350 in July 2022, but then began to fall. It is currently trading at around $316 to buy and $320 to sell.
7) Tourist Dollar: this is the official retail dollar plus the surcharges for the PAIS tax of 30% and the 45% perception on account of Profits or Personal Assets. It is still in force for consumption of less than USD 300 per month.
8) MEP Dollar: this is the exchange rate that comes out of the purchase of a bond whose quotation is in pesos, but is convertible to the same bond that is quoted in dollars, making the sale operation in dollars.
9) Dollar for Foreigners: this is a new dollar for foreign tourists who spend in the country with a debit or credit card. It is a mechanism by which expenses with foreign cards in the country can be settled in the financial market at the value of the dollar stock exchange (MEP).
10) CEDEAR Dollar: this is the implicit exchange rate that comes from the purchase of these Argentinian Certificates of Deposit, the papers that follow the price of the quotations of companies abroad, such as Amazon or Apple.
11) Crypto Dollar: this is the quotation derived from the transaction of cryptocurrencies whose value is tied to the dollar. It is the only quote that operates 24 hours a day, seven days a week.
12) Contado con Liqui Dollar (blue chip swap rate): this is a quotation that originates from the purchase and sale of bonds and shares that are traded both in the local market and abroad. They are bought in pesos, sold in dollars and settled abroad.
13) ADR Dollar: its quotation is similar to the one of “contado con liqui”, but instead of bonds, it is made with shares of Argentinian companies listed in Buenos Aires and New York.
14) Qatar Dollar: it is for consumption over USD 300 per month. It is formed by the exchange rate of $163.5, the PAIS tax (30%), plus the perception on profit account of 45%, plus 25% of perception of Personal Assets. It is named after the World Cup venue, but applies to all expenses over USD 300 made in any country in the world.
15) Luxury Dollar: applies to the purchase of luxury assets, such as high-end cars and motorbikes, private jets, recreational boats, premium alcoholic beverages, watches, etc.
16) Techno Dollar: implies access to up to 70% of the dollars exported at the wholesale exchange rate.
17) Soya Dollar II: at the end of November 2022, the Argentine Government implemented the Soya Dollar II. Unlike the program implemented in September 2022, the dollar will cost $230 to encourage producers to liquidate their retained harvest, which will run until December 31st, 2022.