Definition of Exchange Stock

The Exchange Rate is a concept that originated and is widely used in the Argentine Republic to refer to a measure that the government of Cristina Fernández de Kirchner took in November 2011 and that basically consisted of restricting the sale of the dollar currency in the country. One of the consequences of this measure so questioned by the citizenship and economists, among others, was the creation of a parallel exchange rate, popularly called Blue Dollar, and that it knew in some moments to surpass the official exchange in seven pesos, nothing more and nothing less.

Very serious consequences on economic activity

But the creation of the Cepo did not have as the only consequence the generation of a blue dollar, it also gave rise to a very strong and growing inflation, various types of exchange (tourist, card), a fact that made the exchange market rare and complicated, but also caused severe complications in imports and exports, in the real estate market, among other areas that were certainly paralyzed.

The mission to prevent currency flight that never worked

The Fernández de Kirchner management that installed him in November 2011 made the decision to restrict the sale of foreign exchange before the incessant flight of capital from the country. With this measure they proposed to stop this massive action but four years later the measure showed that it was not not be positive at all since, in addition to not preventing the outflow of foreign currency abroad, it complicated and totally paralyzed the economy.

Request authorization from the AFIP

On November 1, 2011, Argentines who wanted to acquire dollars had to request authorization from the AFIP (Administration Federal of Income Public). An income floor was imposed to allow the purchase and that also meant that very few people were able to buy dollars by opening that parallel market that we mentioned above lines and that at a certain point marked the economic pulse of the last four years in the country. That is, the prices of products and services and the economy in general moved by the value of Blue and not by the official dollar.

Many political analysts consider that this measure was the beginning of the end of the Kirchner era since the middle class notably resisted the measure.

President Mauricio Macri lifts the stocks after his electoral promise

Throughout 2015, the year of elections in the country, the various candidates tried to seduce the electorate anticipating the lifting of the stocks if they came to power, one of the most forceful in this regard was Mauricio Macri.

And the promise came true, on December 17, 2015, when the Minister of Finance and finance from Argentina Alfonso Prat Gay announced the exit of the foreign exchange stocks.
Such action implied a devaluation of the Argentine peso -balanced in its announcement week-, being thus the price of the single dollar was between $ 12.80 and $ 13.10 for the purchase and sale, respectively.

Photos: iStock - alexmak72427 / BsWei