Encouraging economic news from Latin America, where President Kirchner of Argentina is giving up her last US dollar account. It turns out that, in a nation of 9% official inflation and 25% actual inflation, people are unaccountably keen to hold dollars rather than pesos. How strange.
Dear Cristina is only too pleased to explain her reasoning for the switch:
"I've just had one fixed term account in dollars for some time," President Fernandez said on Wednesday.Yes, I'd imagine you could get a great 8%-10% interest rate on a peso account; I can't imagine that dollar accounts pay any interest, given the demand for them and bureaucracy-induced cost of operation:
"And I've decided to put it in pesos, it's more profitable to have it in pesos."
People wanting to buy dollars have to give their national identity and tax number, which must then be approved by the national tax agency (AFIP) before the transaction can go ahead. [...] Argentines wanting to travel abroad must prove their money was obtained legally and tell the tax agency when and where they are going, and why.And yet, Cristina, people are clamouring for dollars. Why might that be, do you think?