Real exchange: US$ 1 is equivalent to 1.40 Argentine pesos?
Taking the nominal value of the peso and dollar basis in December 2001 and considering the real inflation differential occurred since then between Argentina and the United States (computing a private measurements averaged since the beginning of 2007, to avoid the distortion caused by manipulating the official figures since then), anyone can reach the actual outcome of the peso against the dollar: $ 1.415.
This value is just a penny and a half above the value of $ 1.40 through which the Eduardo Duhalde administration tried in vain, in early 2002, addressing an orderly process of the peso devaluation (after the implosion of convertibility) which ended dramatically, costly and messy.
Therefore, the president of the Federación Agraria Argentina (FAA), Eduardo Buzzi, demanded a dollar above the four pesos to compensate for the loss of agricultural producers competitiveness.
This situation could be explained “with the movement of passengers from Argentina, to the U.S.and Canada “, whose numbers soared in recent years. INDEC figures show that to those countries, 85,400 Argentines traveled in the first nine months of 2007, 116,800 in the same period in 2008 and 133,000 in the same period last year.
Buenos Aires Governor Daniel Scioli said on Monday that the current level of exchange rate “is competitive” and asked not to be “masochistic” in reference to the sectors that demanded a higher dollar.
The authorities of the Central Bank (BCRA) said that “the current exchange rate is above equilibrium level of a medium and long term in any of the usual definitions, so there is no exchange rate appreciation.”