4 ms·

I think this 837 figure is the official rate but I don't understand what real-world significance it can have when pesos are actually being bought and sold at so

• imtringued 3y ago
  The black market rates only apply to private households. Businesses must have clean accounting books. The problem is that this official rate is inherently a subsidy for those who have access to it for the purpose of exchanging peso into dollars and a punishment for people who want to exchange dollars into peso. The only benefit an exchange rate policy has is that it makes a countries' exports competitive on the international market. This is relevant for developing countries intending to build up a trade surplus. A floating exchange rate is better for developed countries with balanced trade. The previous exchange rate policy in Argentina didn't really serve any purpose other than to paper over domestic problems. There was no "grand strategy" behind it, so it needs to go.