Argentine peso devalued by 90% against the dollar in 2020
Courtesy Libertad y Progreso
LA MAÑANA ONLINE – According to estimates by some national media, the “blue” dollar had a 118% rise during 2020, and according to economist Aldo Abram, executive director of the “Libertad y Progreso” Foundation, the “gap” between this parallel quotation and the value of the official exchange rate it will continue to increase during this year, and in the annual average it will exceed 100%.
Also, the professional told La Mañana that taking into account the values of the legal parallel quotes of the dollar, the devaluation of the national currency during 2020 was in the order of 90%.
In turn, he evaluated that the price of the “official” dollar will have monthly increases in the first quarter of 2021 that will exceed 3%, while in the following months, the rises of that currency will be reduced, mainly during the months prior to the legislative elections, because the national management will try to apply various strategies to avoid significant changes in the exchange rate and its effects on the values of goods and services.
Next, the economist explained the reasons for the important rises that the “blue” dollar had during 2020. “With a Central Bank that is dedicated to issuing to finance a government that spent a lot and that had no other source of financing, because the State reached the quarantine ‘bankrupt’, they have many more pesos than what the people want, with which the value of the peso goes down. And when any currency loses value, that is immediately noticeable in the exchange markets,” he explained.
“When the official market is not free, as is the case in Argentina, and the value of the national currency is artificially fixed with respect to the dollar, this is reflected in the prices of ‘parallel’ dollars in general. That’s what we saw during 2020, ”he added.
Likewise, the expert indicated that in the case of the “blue” dollar, which is an illegal market and showed a greater rise than the legal parallel prices, the increase was due not only to the depreciation of the peso, but also to the excessive restrictions applied on Cash With Settlement and other legal parallel markets.
“A lot of people with low savings traded in the ‘blue’ dollar market. People are not going to be left with a currency that depreciates, and that loses its value over time, “said Aldo Abram.