BUENOS AIRES, April 25 Argentina's black-market
peso slid past 9 per dollar on Thursday in minimal trade volume,
reflecting stubborn private demand for greenbacks amid a virtual
ban on foreign currency purchases.
The spread between the black-market rate and the official
exchange rate widened to 77 percent.
Economists say investors are putting off projects due to
financial uncertainty, which includes speculation about a
devaluation after October mid-term elections even though
government officials reject this.
The black-market peso closed down 2.7 percent at a
record-low bid price of 9.16 per dollar, according to
Reuters data. This contrasted with the official interbank
exchange rate, which remained unchanged at 5.1725 per dollar
Traders said business was practically frozen due to rumors
that tax agency officials were monitoring the black market.
But they said demand is strong because investors want to
drop their pesos, whether by buying dollars or stocks and bonds.
The MerVal blue-chip stock index closed at a record high
"The underlying issue is that growing numbers of people want
dollars. Today buying dollars is the most profitable investment
around," economist Rodrigo Alvarez told reporters.
Another economist, former Finance Secretary Miguel Kiguel,
said the black market "is very small in size but very big in
terms of its impact on long-term investments."
Inflation of roughly 25 percent a year and mounting fears
that the peso could start depreciating at a faster rate have
spurred Argentines to seek refuge in dollars. The country has a
long history of devaluations and economic crises.
Soon after President Cristina Fernandez won re-election in
2011, her government imposed limits on foreign currency
purchases to stem capital flight. The controls were tightened
and savers cannot buy dollars at the official rate.
Latin America's No. 3 economy grew 1.9 percent last year
versus 8.9 percent in 2011.
The central bank intervenes regularly to keep the peso from
swinging sharply on the official market. Fernandez herself has
dismissed the possibility of a deeper devaluation.