Argentina’s black market peso fell to its lowest in 10 months on expectations that a new government in December will have to devalue the official rate which is strictly controlled by the central bank.
The street value of the peso weakened 0.98 percent to 15.3 pesos per dollar, according to Ambito. That compares with an official exchange rate of 9.25.
While the majority of emerging market countries from China to Brazil are weakening their exchange rates to remain competitive, President Cristina Fernandez de Kirchner’s administration is refusing to accelerate the pace of depreciation of the peso ahead of Oct. 25 elections where the front-runner is from her party. The next government, which takes over Dec. 10, will have to address the overvalued exchange rate, according to Fausto Spotorno, chief economist at Orlando Ferreres & Asociados.
“There’s a significant expectation of devaluation,” Spotorno said by phone from Buenos Aires. “The next government will have to... (Read More)