The exchange restrictions imposed by Mauricio Macri in 2019 and the toughening of the new president Anibal Fernandez to prevent capital flight and thus be able to put a brake on the ferocious loss of U.S. currency to avoid a collapse of the financial system.
Of course, these restrictions have a big consequence and that is the emergence of various exchange rates of the U.S. currency.
At present, citizens who comply with the requirements imposed by the government can only acquire a quota of 200 USD per month and pay 65% tax on the value of the dollar reported daily by the Central Bank of our country.
Today in our country we can say that we have different exchange rates of the American currency and they and the difference between them lies in the way each of them is acquired.
Through the official market you can acquire the SOLIDAR DOLLAR, on which you must pay a tax of 65% on the official quotation value. And importers and exporters can access the WHOLESALE DOLLAR.
Consumption with credit or debit cards for consumption abroad is also subject to the 65% tax surcharge.
Of course, there are options to alter the restrictions imposed by the government such as the acquisition of the BLUE DOLLAR, which is the dollar that is bought on the illegal market and its price is higher than the official dollar
Dollars can also be acquired by trading on the stock market through the purchase of public securities and dual-quoted shares, i.e., they are quoted in Argentine pesos and in U.S. currency, since they are traded on local and foreign markets.
Here we have two options:
Cash on Delivery (CCL)
This type of exchange arises from buying bonds or shares against pesos in the local market and selling them in dollars abroad. You can also do the reverse operation, that is, buy them in dollars abroad and sell them in pesos in the local market, which almost nobody does.
This is the way that large companies make dollars, although a few individuals also do it.
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Dollar Exchange or MEP
This exchange rate is very similar "cash with settlement" (CCL), except that here the purchase of bonds in Argentine currency and the sale of the same bonds in foreign currency are made in the local market. Of course, this operation is only possible in bonds and shares that have a dual quotation, that is, in pesos and in dollars.
Therefore, it is not an easy task to determine the value of the dollar in our country, due to the great amount of quotations we have.
This results in a great distortion of the relative prices of the domestic economy, helped by the high levels of inflation and the non-existent investment and savings in the country
Thus, this exchange control brings several consequences, some of which are beneficial, such as avoiding a great depreciation of the Argentinean peso due to a capital flight, which is valid for the very short term; but in the long term, the consequences are catastrophic, causing the incentive of an informal market, with all the implications that this brings, and above all, because it is a great disincentive for investment and savings.
Although exchange controls are usually effective to avoid shock situations or to avoid an exchange run, in the long term they are unsustainable, due to the gaps in the different quotations we have seen and therefore generate a strong disincentive to the liquidation of foreign exchange in the agro-export sector.
To give you an idea of the gap that may exist between the official dollar, which exporters must pay with other currencies, and the dollar of the other currencies is above 100%.
