Dollar Blue Argentina: Black Market Exchange Rate Skyockets After Primary Election

Buenos Aires — The “dollar blue” exchange rate was skyrocketing to new highs this Monday in Argentina, following Javier Milei’s surprise victory in the country’s Primary, Open, Simultaneous, and Mandatory Elections (PASO). The initial reaction among the black market’s main exchange houses was to ask for more Argentine pesos per dollar exchanged, sending the average rate to $690 by midday.

On Friday, the last working day before Sunday’s primaries, the dollar blue had closed at ARS$605.

Argentina’s strict currency controls over the last four years have led to a boom in illegal exchange houses, where locals flock to buy dollars for savings purposes. Accumulated inflation during the Alberto Fernández administration has surpassed the 500%-mark, while the “blue” exchange rate has soared close to 900% over the same period.

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Illegal exchange houses were offering a wide array of rates this Monday, amid high uncertainty regarding the outcome of the general elections in October.

Meanwhile, the government-controlled “official” exchange rate was moved up to ARS$350 today, a more-than 20% jump from where it had ended last week.

The Central Bank announced it had acquired US$220 million on the foreign exchange market this Monday. This occurred on a day when the monetary authority also endorsed an increase in the official exchange rate and key interest rates.

With the market close edging closer, the dollar blue continued to exhibit volatility and retreated to sell rate of $685 in Buenos Aires City. The blue chip “contado con liquidación” stood at $651.13.

Around 1:30PM, the blue dollar buy rate had climbed up to ARS$675, while each greenback was sold for ARS$695, maintaining an unprecedented spread of 20 pesos in a day of extreme volatility.

The financial dollar rates, on the other hand, were rising by approximately 7%. The blue chip, or “contado con liquidación” dollar, was rising by 7.3% to ARS$645.40.

After midday, the informal dollar was stabilizing ARS$690 per US dollar purchased. This way, it maintains an unprecedented spread of 20 pesos with the buy rate, reflecting the uncertainty that has been triggered by Sunday’s surprise election result. The same behavior was reflected in the blue-chip financial dollar rate, known locally as the “contado con liquidación”, which was rising 7% to ARS$646.5.

The contado con liquidación rate is derived from the buying and selling of stocks and bonds. For local transactions, an exchange rate known as “dolar MEP” is used, while the blue-chip swap rate, or “dolar CCL,” is employed for operations that finish abroad.

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The dollar blue opened at ARS$665 this Monday, according to DolarHoy. This marks the market’s first reaction to Javier Milei’s surprise victory. The libertarian candidate secured 30.04% of the votes, while Juntos por el Cambio came in second place with 28.27% of the votes, and the ruling party in third with 27.27%. The parallel exchange rate had closed higher on Friday at ARS$605.