Inflation, devaluation and an interesting time to be in Argentina

M

Still legal currency but I guess soon to be discontinued

OK, so this is the economist in me writing.  I have just read that the new president of Argentina has today got rid of all currency controls, "Macrieconomics" they call it, and I am wondering what the effects will be.

When we arrived in Argentina I was aware that the street price of an American dollar was much higher than the official rate.  I was also aware that Argentinians really wanted dollars rather than pesos.  Therefore I made sure I brought enough dollars with me.  The official rate of exchange from dollars to pesos is 9 pesos to the dollar; the street price, or "blue market" price, is 14.2!  And this is more than easy to access ... just need to go to the most touristy part of town and there are be plenty of young gentlemen willing to do the exchange.  Just two hours ago there were lots of them in Bariloche's central piazza.

But that is all about to change, seemingly.  I even think the banking system knew something was coming as all the one and two peso notes are really in need of replacement.

Today the Argentinian peso floated freely.  Now, if I go to an ATM and "purchase" £100, what rate do you think I will get?  The papers are quoting 19 peso to the pound, or just over 12 pesos to the dollar.  I daren't try it today as I am sure that Nat West will give me the old rate.  But I might try £10 tomorrow just to see what happens.  If there is an inkling of the economist in you, watch this space!