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Mauricio Macri concerned about the surprise fall of the dollar in Argentina
The dollar never ceases to surprise in Argentina. At the end of April it seemed that the price could overflow and exceed 50 pesos. The Argentine government obtained the approval of the International Monetary Fund (IMF) to use its reserves and managed to contain it.
Said action was carried out just in time to maintain Mauricio Macri's re-election chances. Some analysts even believe that the continuity of the government until December 10 could have been endangered.
Little more than two months passed, and now the picture is precisely the opposite. The exchange rate has not only stabilized but has continued its downward trend in the last two weeks, remaining close to the floor of the exchange rate band that had been stipulated at the time with the IMF.
On Friday, July 5, it seemed that a rebound could occur, but the offer made it fall back below 42 pesos in the wholesale market, while in most banks and exchange houses it could be bought below 43 pesos.
A 10% drop in the exchange rate was not in anyone's calculations. Mauricio Macri has expressed his concern after his return from the G-20 meeting. The fear is that the exaggerated weakness of the dollar will lead to a rapid rebound that could lead to more inflation and a drop in confidence in the Argentine economy.
Stabilizing the dollar was something long desired by the Argentine Central Bank and in fact by the entire government, after having spent an entire year of currency crisis, from April 2018 to the same period in 2019. However, it was not in nobody's calculations that the US currency will drop with the speed that it has been doing in recent weeks.
With this new panorama, Mauricio Macri's re-election chances have improved notably, even though the polls continue to show strong parity between the two main contenders.
