Argentina: The US dollar falls again and approaches 2024 lows.

The “contado con liquidación” and “MEP” dollars deepened their declines after their crashes of last Friday.

The CCL (contado con liquidación) falls below $1,100, while the MEP (Mercado Electrónico de Pagos) erases its initial increase of $3.02 or 0.28%, settling at $1,059.19.

In Argentina, the presence of multiple exchange rates is primarily a consequence of government policies aimed at controlling currency flows and managing the country’s economic challenges. The official exchange rate, set by the government, is typically lower than the market demand for dollars.

This official rate is subject to government intervention and is often used for specific transactions such as imports, exports, and government operations.

However, restrictions on access to foreign currency and capital controls have led to the emergence of informal markets where individuals and businesses can buy and sell dollars at higher rates, known as the “blue dollar” rate.

This occurs within the framework of the government’s dispute with the provinces over revenue-sharing funds. In this context, the CCL dollar drops by $-10.01 (0.9%) to reach $1,099.66.

The Argentine financial market moved last week amid a marked and recurring shortage of pesos, driven by Javier Milei’s government through bond auctions aimed at exerting pressure on monetary contraction to combat inflation. This significant monetary contraction is complemented by a growth in deposits.