Why is dollar stable and lower than ever?

There are 20 replies in this Thread which has previously been viewed 6,791 times. The latest Post () was by serafina.

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    I was quite disappointed with the latest IMF measures to tame Argentinian inflation, fixing a range within which the dollar can fluctuate, so I am fairly surprised to see that the dollar has lost power and that there has been little to no change in the last days. The government is not putting any more dollars on the market, so how come the pesos is still strong? It looks like Argentinian economy beats any logic. They touch a factor a nothing change, they do not touch a thing and everything changes. How so?

    To be honest I have not been following this situation so I may be throwing two wildly inaccurate things out here.


    I think the IMF deal prevents the Dollar from falling below 34?


    Secondly, I guess we will see a situation like a couple of months again at some point, where the dollar will go from one figure (36) and collapse drastically (43-44) in just a few days.

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    I am on the other side of the fence (so to speak, meaning that I don’t earn in pesos) and I wonder why pesos prices keeps going up with no apparent relationship with the exchange rate.


    I gave a cost estimate in pesos for a lesson plan and the next day the exchange rate bumped up. I wanted to quote 100 dollars and the next day I found out I had quoted 90.
    And now it is even less... and my quote is fixed for six months.


    I already regret it.



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    Quote from Splinter

    Yesterday the dollar reached almost AR$45 and Macri says everything is fine and we should just get used to it.

    I'm no economist, so I have to ask: is this normal?

    I'm no economist either but Macri might be right. I suspect the oil price being traded in dollars has something to do with it. If it keeps going up then everything else eventually goes up as well.

    Business in this country is not competitive enough. They all seem quite happy to raise prices and pass it on to the consumer....lazy toerags.

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    I realize I had misspelled I have a quote instead of I gave a quote.

    This is one of the rare instances where I deal with Argentinian clients and I always regret it in the end.

    It is a PITA (not because of the people, because of the circumstances!)


    Last year we agreed on giving classes on Saturday afternoon. We initially quoted these 100 dollars because that would have covered our building expenses. Six months later, our building expenses had skyrocketed and the students were still paying 3000 ARS. I couldn't wait for the lessons to be over--- all my Saturdays screwed for pennies!

    Quote from Splinter

    Makes planning anything in this basket case economy a fucking nightmare.


    Quote from serafina

    I realize I had misspelled I have a quote instead of I gave a quote.

    This is one of the rare instances where I deal with Argentinian clients and I always regret it in the end.

    It is a PITA (not because of the people, because of the circumstances!)


    Last year we agreed on giving classes on Saturday afternoon. We initially quoted these 100 dollars because that would have covered our building expenses. Six months later, our building expenses had skyrocketed and the students were still paying 3000 ARS. I couldn't wait for the lessons to be over--- all my Saturdays screwed for pennies!


    My wife has shortly to renew the contracts for the tenants of the shop properties....they've already started to plead poverty to her during recent weeks despite being able to afford holidays, new cars, one is even building a house.


    I told her to call their bluff and increase their rent in line with inflation as that's what they do with the price of the products they're selling. She won't though, hence why they've been tenants for many years. They still moan of course but they're obviously doing well.

    We put a house my wife owns up for rent this month. 25,000 pesos we are asking for, which is a decent amount at the moment. However, I know in a few months this could not be worth much to us. At least it will still cover our rents/expenses in our apartment I suppose.

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    Quote from Semigoodlooking

    We put a house my wife owns up for rent this month. 25,000 pesos we are asking for, which is a decent amount at the moment. However, I know in a few months this could not be worth much to us. At least it will still cover our rents/expenses in our apartment I suppose.


    Are you doing increases every 6 months or 12? Long term or short term? There are expats groups on fb where you could advertise it and find foreign tenants. You can also fix the rend in dollars, but I am not sure this is an option for long term rentals. We did short term in dollars, though. The good thing with short term, is that it is paid in advance.



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    Quote from Semigoodlooking

    We put a house my wife owns up for rent this month. 25,000 pesos we are asking for, which is a decent amount at the moment. However, I know in a few months this could not be worth much to us. At least it will still cover our rents/expenses in our apartment I suppose.

    Most rental contracts have clauses that automatically raise rente every six months. Never do a long term contract without these clauses.

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    We did two rentals before buying. The first one had increases every 6 months. I think it was 12% if I am not mistaken. By semester 3, the exchange rate had stopped rising and the rent value in EUR was up 50%. We left and moved to a smaller place, where the rent increase (30%) was yearly.


    When we were landlord, we briefly rented short-term (all expenses included) in USD paid in advance + 1 month of deposit, which we gave back. The tenants were okay, and so were we.


    I think nobody rents at a fixed price for 24 months.

    Quote from serafina

    We did two rentals before buying. The first one had increases every 6 months. I think it was 12% if I am not mistaken. By semester 3, the exchange rate had stopped rising and the rent value in EUR was up 50%. We left and moved to a smaller place, where the rent increase (30%) was yearly.


    When we were landlord, we briefly rented short-term (all expenses included) in USD paid in advance + 1 month of deposit, which we gave back. The tenants were okay, and so were we.


    I think nobody rents at a fixed price for 24 months.

    No, I know they don't rent at fixed for 24 months. I just never knew every six months was that common, I always thought 12 month increases were the norm. The house we are renting will increase after 12 months too.

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    I think 12-mos is more common, but 6-mos is not that uncommon, either. I have read about other expats who rented with 6-mos increases.


    Anyway, we once did the math and the 12% 6-mos. increase was slightly higher than the 30% 12-mos., but not that much different in the end.

    Also, since in the contract you cannot put % increases, but only fixed amounts, and given you cannot predict how much the exchange rate will fluctuate (except within the IMF range), there is no financial science behind it.


    I think that if your property is nice, well situated, and interesting to affluent tenants, you could try the 6-mos. increases. Do you have a real estate agent or are you dealing with this directly? A real estate agent should be able to tell if your area calls for a 6-mos or 12-mos increase.

    Quote from serafina

    I think 12-mos is more common, but 6-mos is not that uncommon, either. I have read about other expats who rented with 6-mos increases.

    Yes, this is what I thought. GlasgowJohn said most rental contracts are 6 months now, so I was wondering if there is something I missed. I too know people who have rent based on 6-month increases, and have viewed places with the same. However, most people I know are still on 12-months.