Don't know where else to put this so putting it in COMMUNITY: Argentina defaults This is to me interesting as Latin American currencies have been pretty thoroughly trashed recently EXCEPT for the…
Don't know where else to put this so putting it in COMMUNITY:
Government admits privately March 31 debt deadline will not be met
Government admits privately March 31 debt deadline will not be met. Argentina is already admitting that it cannot meet its original March 31 deadline for debt restructuring, the Bloomberg news agency reported Friday, saying the government intends to roll it over until May 7, when a major payment of US$ 1.4 billion falls due.
This is to me interesting as Latin American currencies have been pretty thoroughly trashed recently EXCEPT for the ARPESO which has an "official" exchange rate of 63.735 to the US$ and has held relatively calm since their election last year when it was hit hard. Even then the unofficial street cambio traders were giving as much as 125 pesos to the US$ in Montevideo across the Rio Plata in Uruguay. It is next to impossible to get any news about what the street cambios inside Argentina are buying/selling for as all news of the old blue rate are no longer reported upon. I have searched the net for any trace of the blue rate in recent weeks and cannot find anything, the news is clamped hard on this. Someone is preventing any such news from getting out because if the real peso exchange rate were published Argentina would simply be dead as far as it's foreign debt goes. But, even at the official exchange rate they now admit they cannot service their March 31 bond payments and have applied to the IMF for more money. They are rolling most of this debt service to May 7 but they will be even less able to pay then when the full $1.4 billion payment is due.
This means that one day this spring there is going to be an international currency crisis that will involve some pretty desperate measures, including widespread dollarization ala Ecuador.