The Argentine peso is one of the most devalued currencies in the world, along with currencies like those of Venezuela or Zimbabwe

The Argentine peso is one of the currencies that has lost ground the most against the US dollar since the end of 2019 in this part, according to a private monitor who follows the fate of some of the worst performing currencies in the world. The ranking, which includes the Venezuelan bolivar, the Lebanese pound and the Zimbabwean dollar, does not compare to official exchange rates but to parallel rates, in countries where there are exchange controls like Argentina.

According to “Currency Watch List“(Foreign exchange observatory) prepared by the economist Steve Hanke, Professor at Johns Hopkins University in Baltimore, United States, As of August 27, the currency that had depreciated the most in nominal terms since January 1, 20202 was the Venezuelan bolivar, with a drop of 98.76%.

Next come the Lebanese pound (-86.76%), the Zimbabwean dollar (-84.47%), the Sudanese pound (-80.45%), the Syrian pound (-73.10%) and in sixth place is the Argentine peso falling. by 57.69% against the US dollar. The Top 10 of currency depreciation is completed by the Iranian rial, the Turkmen manat, the Ethiopian birr and the Nigerian naira.

Hanke is the author of the “Misery Index”, which was published this year in the conservative magazine “The National Review” and which combines inflation data with unemployment figures to rank the economies that are suffering the most. macro context. .

Both the ranking of the currencies which depreciate the most and that of the “world misery” of the American academic, a veritable monetary “hawk”, put Venezuela and other countries grappling with serious internal problems in the lead. Lebanon suffered an episode of hyperinflation and an explosion in 2020 that devastated its capital, Beirut. Zimbabwe is under the dictatorship of Emmerson Mnangagwa, an emulo of Robert mugabe, who ruled between 1980 and 2017, when he was overthrown by the military. Sudan is one of the poorest countries in the world and suffers from chronic water shortages and Syria has gone through a civil war in which insurgents have failed to prevail over dictator Bashir.

In the case of the Currency Watch List, Hanke differs from his colleagues on another point. In countries where there are exchange controls and multiple exchange rates, the economist chooses to take the “black market” or “free” exchange rate.

So, for example, the dollar price he takes for Argentina is – taking into account the date of the comparison – $ 182 per note, far from the $ 98 per note which appears in banks and offices of exchange rate and which, without taxes, would be the official exchange rate.

This is why there is the paradox that although the government treads on the official dollar to try to dampen the progression of inflation, and therefore lags the commercial exchange rate in relation to inflation, at least the Argentine peso is among the most devalued in the “free market.”

Meanwhile, the government is not abandoning the foreign exchange peg in the formal market. In August, according to a report by Equilibra, there were more interventions by the BCRA and the “crawling ankle(Official price slippage) accelerated, in large part because the cap reached by net reserves in mid-July was exceeded. D

Since then, the consulting firm that manages Martin rapetti as well as economists Lorenzo Sigaut and Lorena Giorgio, net reserves decreased by $ 1.3 billion due to the larger intervention that the plant had to assume, which in 5 working days (as of September 2) had accumulated net sales of $ 360 million . The report adds that if we also consider the entity’s daily intervention in the bond market “to control the gap” between the official exchange rate and the “alternative” dollars, the loss was $ 500 million. dollars in a week.

According to the consulting firm, “faced with a limited stock of net reserves (around $ 6,500 million), the rate of drainage last week is not sustainable. For this reason, the Centrale gently stepped on the accelerator and the crawling-peg of the official exchange rate went from 12% to 17% (annualized daily variation) and we do not exclude that the importers’ tap is a little firm “. .

According to the report’s calculations, in August, the average exchange rate rose 1% compared to July, against inflation estimated at 2.9% for the period. Prices thus beat the nominal run for the official dollar for the seventh consecutive month. If we also take into account US inflation, it turns out that “the bilateral real exchange rate against the US dollar appreciated by 1.5% over the month, and will reach the primary elections with an appreciation. actual of about 9.5% in cumulative years, ”the report says.

As Equilibra also expects the government to continue raising the official dollar at a rate of between 1% and 1.2% per month until November, the peso will arrive at the elections with a real cumulative appreciation of 11%.

Stretching the assumptions, the report’s authors envision that the government will accelerate the exchange rate “slippage” after the elections in the second half of November (legislative elections are held on the 14th of this month) and

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