Argentine Capital Control Extension
As you are probably aware, Argentine currency controls are still presenting obstacles for businesses who need to send money into or out of the country. Global market volatility is making this need more urgent for most investors, who need to act decisively in these uncertain times.
The Blue Chip Swap is an efficient, cost-effective way to fund your business in Argentina, and among the only viable methods of repatriating funds, paying dividends, or meeting foreign debt obligations. We have seen the difference between the Blue Chip Swap rate and the "official" Argentine Peso/US Dollar exchange rate reached 100%. That is, for every Argentine Peso one could get through the traditional FX market, you could get two through the Blue Chip Swap. The spread has since narrowed to around 65%:
Blue Chip Swap Rate, 2019-Present
Source: Bloomberg, March 15th
As the capital controls in Argentina become more restrictive, the Blue Chip Swap process becomes more attractive and the spread between the BCS rate and the official rate expands. Our team is a leader in providing cross-border treasury services to businesses with operations in Argentina. If you'd like help managing your exposure to the Argentine Peso, don't hesitate to reach out to us at +1.604.643.0101.
Disclaimer: Canaccord Genuity Corp. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and Canadian Investor Protection Fund (CIPF). The comments and opinions expressed in this commentary are solely the work of the Cash Management Group and Andrew Johns.
Market Updates
Our market commentary breaks down the latest business, financial and money news. If you’d like to receive all of our market update emails, send us an email by clicking the subscribe button. If you found this content helpful, share it widely!