September 23, 2019
Latest News

Argentina’s obsession with the dollar, a vicious circle amid a crisis

By Rodrigo García

Buenos Aires, Sep 12 (efe-epa).- In the bars, stores, at lunchtime or when school’s out, a lot of Argentina is asking itself the same question: How much is the dollar worth today?

The answer is capable of sending shock waves across the nation, battered by repeated crises with the currency as the main protagonist that has the country’s economy stuck in a vicious circle.

Like the tango, soccer and barbecue, the dollar has earned a spot among Argentina’s beloved traditions in a society obsessed with a currency that is not its own, but which has been adopted as the best method to hang onto savings and get away from the weak and unstable peso.

When the value of the US dollar increases, particularly when this happens suddenly, two things happen in Argentina: as the national economy, based on pesos, weakens and inflation goes up, the dollars stashed away by savers remain safe.

“It’s an aversion to the peso, we don’t want pesos in our pockets,” one of the many Argentinians passing through the main banking district of Buenos Aires, which houses many foreign exchange bureaus, said.

At 10 am, when these currency traders open, and above all during times of recession, a cloud of uncertainty lingers over the country for the five hours of market activity. On critical days, the exchange rate can undergo sharp lurches.

Television channels will place small windows somewhere on the screen so that viewers can follow the developments live.

“In Argentina, knowing the value of the dollar four years ago could be the winning question on a TV quiz show,” Mariana Luzzi, a sociologist who along with her colleague Ariel Wilkis has studied the nation’s behavior when it comes to the dollar, told Efe.

The researchers of the book “El dólar. Historia de una moneda argentina (1930-2019)" (The dollar. History of an Argentine currency,” carried out an in-depth revision of the circumstances that made the dollar “inseparable” from the South American country, where a plethora of songs, theater shows, books and movies have made reference to the currency since the start of the 20th century.

The roots of Argentina’s troublesome love story with the dollar began in 1931 when the government of José Félix Uriburu established the first exchange controls to counter the impact of the global crisis of the previous decade, when the export of meat and grains stopped being enough to maintain a functioning economy.

“The naturalization of the North American currency that we have today in the Argentine economy is a result of a very slow maturation process over many years,” said Luzzi. “In the heat of many crises layers built up that led the dollar to being so present in daily life.”

Financial comings and goings have led successive democratic and dictatorial governments to take measures that have not managed to maintain a strong local currency.

The most-remembered “plan” to stabilize the currency and placate the consequent price increase came in 1991, when the then-economy minister Domingo Cavallo brought in a law that equated the value of the peso with that of the dollar for a decade.

Inflation was under control but the bomb in this artificial system didn’t take long to go off. With the 2001 crisis, which limited cash withdrawals from the banks, the country shelved currency convertibility policies in favor of an independent peso that successive presidents attempted to clamp down on this through restrictions.

Amid fresh financial chaos mere days ago, President Mauricio Macro was forced to bring in measures to stave off the constant flight of capital.

Those who frequent Buenos Aires’ financial center have got it clear: “people are trying to protect themselves with a currency with which after the crisis they’ll have more buying power,” said Santiago. EFE-EPA

rgm/sh/jt

News history
Tesla stock has risen this month as its 3rd-quarter numbers approach

By David Marino-Nachison

Australian Navy begins sea trials of 3rd air warfare destroyer

Sydney, Australia, Sep 16 (efe-epa).- Australia has begun the first phase of sea trials of its third and final Air Warfare Destroyer, the Department of...

Nissan Motor CEO steps down in the wake of bonus scandal

Tokyo, Sep 16 (efe-epa).- Hiroto Saikawa stepped down from his post as chief executive officer of Nissan Motor on Monday and has been replaced by Yasuhiro...

Trump says US is "locked and loaded" to respond to attack on Saudi oil

Washington DC, Sep 15 (efe-epa).- The president of the United States on Sunday warned that his administration was "locked and loaded" to respond to a recent...

Nissan CEO steps down over bonus scandal

Tokyo, Sep 9 (efe-epa).- Nissan Motor's CEO, Hiroto Saikawa, will step down on 16 September on the back of an investigation into over payments the executive...

Volkswagen to pay multi-million-dollar settlement over 'dieselgate' Australia

Sydney, Australia, Sep 16 (efe-epa).- German car giant Volkswagen has agreed to pay millions in compensation to those affected by its diesel emissions...

General Motors braces for first nationwide strike in 12 years

Washington DC, Sep 15 (efe-epa).- The United Automobile Workers trade union on Sunday called for a nationwide strike of 48,000 employees at General Motors,...

Mexico seeks to topple Brazil's Volkswagen Guinness World Record

Puebla, Mexico, Sep 15 (efe-epa).- The Mexican state of Puebla over the weekend attempted to take the Guinness World Record for the most Volkswagen vehicles...

Argentina's gov't to present new budget amid economic woes

Buenos Aires, Sep 15 (EFE).- Finance Minister Hernan Lacunza will present the proposed 2020 budget to the Argentine Congress this week, a budget that will...

World's biggest oil producer reduces output by 50 percent after Saudi attacks

By Suleiman al-Assad

Battle to power electric vehicles reaches Sweden

By William Boston

Are central banks losing their clout?

By Randall W Forsyth

Ecotourism, the answer to Latin America's rural development needs

By Maria Jose Brenes

Havana-based cigar maker says it doesn't foresee Helms-Burton lawsuits

Havana, Sep 13 (efe-epa).- Habanos S.A., a Spanish-Cuban joint venture that is a leading maker of Premium cigars, said Friday it does not believe it is at...

US pledges to increase trade with Brazil, without mentioning bilateral deal

Washington, Sep 13 (efe-epa).- US Secretary of State Mike Pompeo promised his Brazilian counterpart here Friday that exchanges of goods and services between...

Mexicans make drinking straws from reeds to curb use of plastic

Jose de Jesus Cortes

London, Sep 13 (EFE).- The London Design Festival returns this weekend to the British capital with events and facilities bringing together the best of the...

China exempts US soy, pork products from tariffs ahead of US negotiations

By Paula Escalada Medrano.

Vaping giant Juul Labs debates pushing back on US' new ban on e-cigarettes

By Jennifer Maloney

Trump's plans for oil drilling in Arctic refuge clear big hurdle

By Timothy Puko

IMF: US-CHINA TRADE WAR STARTING TO WEIGH ON GLOBAL ECONOMY

Washington, Sep 12 (efe-epa).- The International Monetary Fund said Thursday that the trade war between the United States and China is already triggering a...

Argentina’s obsession with the dollar, a vicious circle amid a crisis

By Rodrigo García

New tariffs applied on Chinese imports to the US

Beijing, Sep 12 (efe-epa).- China's Customs Tariff Commission of the State Council has postponed the planned 25 percent tariffs on 16 products from the...

EU's top diplomat visits Mexico to boost trade agreement

By Eduard Ribas i Admetlla

I agree Welcome to news4europe.eu. We use cookies to improve your online experience. Find out more.