Looking at the dollar from Argentina

the argentine government is struggling with rising inflation rates (12% is projected for the full year 2005) and a falling dollar exchange rate with the argentine peso... they would like to have the dollar at a 3-to-1 exchange but the markets are saying no thanks... here's a view from an editorial in today's buenos aires herald...

Even record Central Bank purchases of 172 million dollars on Wednesday proved wholly inadequate for defending the 2.90-peso mark (never mind the government target of three pesos at the start of the year) — even 2.85 is starting to look ambitious. It is too often assumed that the dollar’s value is determined here rather than by Washington but in neither place are trends helping the greenback. While little or nothing is being done against mammoth fiscal and trade deficits in the United States, the greenback is losing all scarcity value as a low exchange rate brings in export dollars while the US currency is being scorned on the local bond market (only 20 million dollars worth could be issued on Tuesday).

argentina ain't the only place this is happening, btw...

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