Five years ago, not many Argentines thought the splintered opposition would unite behind one candidate to win the presidency away from the Peronists. And yet it did - Mauricio Macri is the new president, and he's already been changing economic policy in Argentina dramatically. So how will it affect wine exports?
Obviously this question is a small one in the grand scheme of things, but we're here to talk about wine. One of the new administration's first actions was to remove the restraints on Argentina's currency, the peso. Previously, the central bank had used its reserves to buy pesos and prop up the currency's values artificially. Moreover, Argentines faced restrictions on trading pesos for other currencies.
Together, these measures created a black market where the value of the peso was markedly lower. But exports and other monitored transactions had to use the higher official rate. Not surprisingly, when the peso was allowed to float freely on international markets, it lost roughly 30% of its value to settle closer to the black market rate.
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