$500M in cash was left stranded in Argentina’s main airport last week.
Folks often seek out safe assets like US dollars during turbulent times. And with Argentina just days out from a high-stakes election, the dollar rush has accelerated.
In practice, this means:
- 💵 Banks literally have to fly in US cash to meet that demand, and
- 📉 The associated money-changing makes Argentina’s volatile peso even more volatile, accelerating the dollar rush further.
So local authorities tried to break the cycle by shutting down the airport’s cargo terminal last week, just as planes were literally hauling in piles of cash. Authorities then backtracked once banks got spooked.
Intrigue’s take: Take a look at the peso-to-dollar exchange rate chart over the past decade. It only goes in one direction.
That might be why the election front-runner, Javier Milei, wants to ditch the peso for the dollar. But these past few weeks are a glimpse into how complicated and chaotic that process will be.