Argentina: Which peso are we talking about anyway?
When the news broke that Argentina was thinking of merging its currency with that of its neighbour, Brazil, my immediate question was: which Argentine peso?
There is no single Argentine peso. There are multiple official and unofficial exchange rates. The latest tally I saw from credible sources was that there are around 30 different FX exchange rates to the dollar alone.
My favourite is still the 'Coldplay dollar', which was used for the UK band’s tour of the country in October 2022. Other recent versions include the 'Qatar dollar', which set a specific rate (of Ps300 to the dollar) for all consumption on credit cards in Qatar during the World Cup.
Multiple exchange rates are the Argentine government’s way of creating taxes without calling them taxes. They aim to stem outflows of the dollar that would naturally occur because of the official rate’s overvaluation – around Ps188 on February 6.
The success of the Plano Real owed as much to the technicalities of Brazil’s financial infrastructure as it did to the actual idea
A need for a radical currency reboot for Argentina is obvious. This column argued as much in December 2021. My proposal then was (and still is) in favour of an adaptation of Brazil’s Plano Real from the early 1990s.