“It is noted that this currency has strengthened over the year by almost 45%.”, — write: www.unian.ua
It is noted that this currency has strengthened over the year by almost 45%.
The strengthening of the currency is felt in Argentina as prices in dollars rise / photo depositphotos.comThe Argentine peso strengthened more than any other currency in 2024. This situation plays on the popularity of the libertarian president Javier Millay.The Financial Times writes that in the 11 months of this year, the peso strengthened by 44.2% against a basket of currencies of trading partners adjusted for three-digit annual inflation in Argentina. That’s well ahead of the 21.2% increase in the second-place Turkish lira.
The rise in the government-set exchange rate has been repeated in several legal and illegal markets where Argentines buy dollars as access to the official exchange rate is limited.
This trend is popular among Argentines, for whom the average salary from December 2023 to October 2024 almost doubled in dollar terms to $990 between December 2023 and October 2024, after seven years of almost constant devaluation. But you have to pay for it. Argentina’s central bank is struggling to rebuild its virtually empty foreign exchange reserves, spending dollars to prop up the peso.
Now some analysts are warning that the rapid depreciation of the real in neighboring Brazil and the potential tariff policies of new US President Donald Trump could leave Argentina vulnerable to a sudden devaluation.
“Miley’s program is working, but a stronger peso is the biggest risk going forward,” said Ramiro Blasquez, head of research at investment bank BancTrust. “If the peso continues to strengthen, or if there is a strong external shock, demand for cheap dollars could increase sharply, increasing the risk of devaluation.”
The strengthening of the currency is felt in Argentina as dollar prices rise. Business leaders privately fear that such dynamics may soon affect the competitiveness of Argentine exports.
The strengthening of the peso is a side effect of Miley’s efforts to stabilize an economy that was teetering on the brink of hyperinflation. After an initial significant devaluation in December 2024, it has kept the peso largely stable throughout the current year. In total, in 11 months, the value of the currency fell by only 18%, although inflation during the same period was 112%.
Miley argues that Argentina can become competitive through deregulation, lower taxes and improved access to credit. Meanwhile, the government expects the foreign exchange deficit to narrow in the coming years as large-scale investment in vast reserves of lithium, shale oil and gas will boost exports.
Rating of Ukraine – the main newsThe Economist published rating data for July 2024, according to which the cost of a Big Mac burger in Ukraine is 118 hryvnias, and in the United States it costs $5.69. Thus, the Ukrainian currency is undervalued by 49.5% compared to the actual exchange rate of UAH 41.05/dollar.
At the same time, the international rating agency Fitch Ratings confirmed the long-term rating of Ukraine in foreign currency at the level of “Limited default”.
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