Dollar Hits All-Time High as Argentine Authorities Shift Strategy

The U.S. dollar reached an all-time high in nominal terms on Argentina's foreign exchange market at the end of August, closing at AR$1,512. This is a significant milestone, as the government had intervened to prevent the currency from reaching this level throughout much of the month.

The wholesale exchange rate has been above AR$1,500 for all five trading days in Argentina's foreign exchange market, marking a shift in strategy by the authorities.

Economist Federico Glustein expects tension in the exchange rate to push the wholesale dollar to a range between AR$1,550 and AR$1,470 in September. He cites low liquidity in pesos within the financial system as one reason for this expectation.

Joaquín Alvarado, an economist at the consulting firm ACM, noted that the amount of foreign currency generated by agricultural exports is a key factor to consider. Although the cumulative revenue from the agricultural sector has remained at an average similar to historical levels between January and July, it tends to decline in September.