Argentina's foreign exchange black market went dark on Thursday, with four traders citing a crackdown by authorities on the informal marketplace as the reason why no benchmark prices were set and basically no trading operations conducted. The country's informal markets have flourished amid strict capital controls that limit access to dollars, pushing the price of greenbacks up over 800 pesos in the black market and other parallel markets, well over twice the official rate.
"There are controls everywhere," one of the traders told Reuters. Trades are often carried out on the street or in clandestine exchanges. "We are not operational and no one comes out to trade, so it seems like it is going to be a lost day." The moves comes as the government tries to tamp down trade in unofficial markets, where huge demand for dollars has pushed up prices far from the official exchange rate that is tightly controlled and has been frozen at 350 pesos per dollar.
In the black market, locally known as the "blue", the currency hit an all-time low of 850 per dollar on Wednesday, as political uncertainties ahead of an Oct. 22 general election and a longstanding economic crisis hurt investor sentiment. Other parallel markets such as the blue chip swap and the MEP, in which participants can trade dollars via bond transactions, were still functioning, with the peso trading at 908 and 785 per dollar respectively.
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Argentina FX black market goes dark as traders cite crackdown
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