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Argentina's peso tanked and its reserves are dwindling. GlobalPost spoke to ordinary residents about what it means for them.
BUENOS AIRES, Argentina — With soaring prices and the peso in free fall, Argentines have plenty to worry about these days.
The government is rapidly enacting measures to shore up the currency, but the measures appear to be unpredictable.
On Monday, the government said it would relax some of its tight restrictions on buying dollars — but it’s still keeping a short rein.
Citizens can buy up to US $2,000 per month if their monthly income is more than 7,200 pesos, or about $850. The state is also lowering the tax rate on dollar purchases from 35 percent to 20 percent.
These measures come after the Argentine peso last week took its sharpest tumble against the dollar in more than a decade. On Thursday, the local currency lost 12 percent of its value in 38 minutes. Traders then could sell the dollar for more than 13 pesos on the black market — 70 percent higher than the official exchange rate.
To top it off, the nation’s international reserves have shrunk to their lowest level in 12 years.
Meanwhile, President Cristina Fernandez de Kirchner was on official business in Cuba for a summit — riling critics with a flurry of glowing tweets from her time with Fidel Castro.
Si, claro, también hablamos de Hugo. Mucho. Recuerdos imborrables. Nostalgias infinitas. pic.twitter.com/IcFuT5VoSR
— Cristina Kirchner (@CFKArgentina) January 27, 2014
In interviews in Buenos Aires, GlobalPost found that the government’s efforts so far have done little to calm nerves. Many residents are confused about the seemingly erratic policy shifts and have lost faith in their currency and government.
After their country’s crippling 2001-2002 economic crisis, they're also not keen to repeat history.
"We have no idea what to charge people. I have a furniture store, and we have to wait until there’s a new announcement because no one knows what they’re going to charge."
"I also don’t think restrictions on buying dollars are fair. You have to buy the dollar on the black market. I’m a little depressed. We hope that they’ll modify the measures they’ve taken, I’m not optimistic, but we’ll see."
"I have hope that [the government] will leave and other people will do things better. There’s still a year and a half until elections and I don’t think much will change until then. It would be pretty optimistic to think everything will stay how it is. If it gets any worse, it will be a catastrophe for everyone.
"We don't know what to charge, what it will cost at the supermarket. On Saturday, concert tickets were 1,200 pesos to see a singer I liked. Today [Monday], I went to buy the tickets and the same tickets were 1,500 pesos. That was a 20 percent increase from Saturday to today. That’s how it’s going to be with food, drinks, with everything. If you have a salary, that is not going to increase. Quality of life will worsen for everyone."
“First they institute a block, then they lift it. If you buy a package they charge you a tax of 35 percent. What’s going to happen? Supposedly, there is a shift, but it doesn’t help, because you still have to justify where you have money from in order to buy dollars."
“Before you could buy dollars, or do whatever you wanted. Now you can’t buy appliances, nothing, because you don’t know how much anything is worth. Saturday, for example, you couldn’t buy anything. We have no idea what’s going to happen … It’s a bad time."
"We had something similar years ago, but it got better. In this moment, our president isn’t here, we don’t know what will happen, but we’ll see what she does and says. I think it will get worse.”
“It’s going to cost those who are further down the socio-economic ladder more, as always. It might cost me more, but the people it will really affect are those in a different social class."
"I don’t buy dollars, I don’t have to have dollars. There is a part of the population that has always wanted to save in dollars since the country became indebted [in 2002]. Dollars have always been the country’s problem. The country shouldn’t be dollarized. Everything is speculation. Businessmen want to generate fear so that the market doesn’t work freely."
In one image, an internet user expressed perhaps the most bemusement of all. This post on imgur.com appeared along with a caption in Spanish saying, "Finally, the AFIP [finance authorities] revealed the new formula to calculate how many dollars can be bought."
— El Niño (@elNinoRodriguez) January 26, 2014
And a tweeter shared this comic that's making the rounds among Argentines. It mocks what to many residents sounds like double-speak by the government when referring to the country's currency issues. In English, the cabinet chief and economy minister say:
"We've decided to lift the restriction ..." "That we never had!"
"In order to be able to buy dollars ..." "That we don't have!"
"By devaluing the peso ..." "Which we're not devaluing!"
"... To lower inflation." "Which we didn't have either!"