Saturday, October 31, 2020

When black market dollars are your only hope of salvaging your life savings

Argentines are facing a currency crash that will wipe out their savings.

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Argentines are being forced to turn to the black market to convert their pesos into US dollars in anticipation of their currency collapsing.

Ordinary savers are finding it impossible to buy dollars through official channels, reports the Buenos Aires Times.

This desperate rush to buy dollars is not part of plans to go abroad on holiday – obviously that’s out of the question right now. People are terrified of their savings being wiped out as the peso plummets and a complete crash seems on the cards.

Most of the country’s major retail banks have notices on their websites saying foreign-exchange transactions can’t be completed.

“Right now, you can’t buy or sell dollars,” Banco Galicia says on their site. “We apologise. We are adapting to the new rules.”

The new rules in question have been issued by the government and the Central Bank, who are together seeking to hold onto hard currency. To do so, they have slapped a new 35% tax on dollar purchases, which already faced a 30% levy.

Consequently, demand for greenbacks in Argentina’s black market is surging and the unofficial street-corner exchange rate has rocketed to 141 pesos per dollar, nearly double the spot rate of 75.

Most Argentines are convinced things can only get worse for whatever money they have left.

 

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