Blue dollar: how much money does this market handle and how is the price set?

However, the economist Federico Glustein estimates that handles a daily volume of between US$3 million and US$5 million per day. And he clarifies that, “lately, it is closer to the low level of operation as a result of the measure that allows credit cards to apply the value of the stock dollar to foreigners to charge them for expenses.” He explains that this is taking volume out of it and making it a little less in supply and a little more unstable.

The blue: a small market

It’s about a small and marginal market taking into account that the official one (the Mercado Único y Libre de Cambios, MULC) handles between US$300 million or US$400 million per day and assuming that the CCL operates between US$50 million and US$80 million per wheel.

Thus, as Quintana points out, “its volume, compared to other markets, is much lower and therefore presents unforeseen trend changes, which are the consequence of purchase or sale orders that impact prices.”

And it is that he points out that the prices in the blue market they are fixed as in any free place, by the result of supply and demand, “except on those days in which ‘friendly hands’ are presumed to intervene, although there is no possibility of confirming those actions.”

However, it is also true that there are some variables that can affect the dynamics of supply and demand in this informal market, and the most obvious are, according to Quintana, the abundance of pesos or the need for them in the market and the appetite for dollarize investment portfolios when there is some uncertainty, among others.

“While the other markets are the ones that really handle the ammeter of the currency flowhe Dolar blue It serves to measure the appetite for the dollar because, since access to the official and financial ones is limited, people tend to turn to that place and that usually makes it rise ”, explains Glustein. That is why, when there is less offer or expectation that there will be less offer in the official or more restrictions for agents to access foreign currency, it usually tends to rise.

The truth is that, in the words of the economist Joel Lupieri, from Epyca Consultores, “it is not considered a transparent market, quite the contrary: it operates in total informality” and points out that the price is set by the informal information network that exists between the operators.

Why do many people go to the blue dollar market?

Why then do so many savers go to that market and what makes it so important to the City? “The problem is that people, as there are so many restrictions and bureaucracy to operate in other markets he goes to the dollar that is easier for him to buy because he believes that, in this way, he protects his money from inflation and devaluation”, answers the financial advisor Francisco Di Cristófaro to that question.

But he explains that this is a mistaken concept because, for example, so far this year, the dollar has barely risen 7% and there are company shares and bonds that have had yields well above that level in recent months. “What happens is that people don’t want to have tax problems, they don’t want to fill out forms and data sheets and also He does not know much about how the financial and stock market system works”, he points out.

It is precisely that demand and the offer that balances the elements that determine an approximate price, but Luíeri explains that, ultimately, the caves approximate their points (the purchase and sale price) around what they are learning about their peers.

However, it also clarifies that it is not a uniform price, but that it has differences depending on the geographical location. Thus, the blue price of Buenos Aires differs from the one that is operated in other locations, since, in other important places, such as Rosario or Córdoba, it usually trades higher than in the City of Buenos Aires given the lower existing liquidity.

And Lupieri points out that this is a big difference with the formal markets (such as the official dollar, the MEP or the CCL), in which the price arises from the operations that are being registered on the market screen. “These operations are registered in the systems and it is easy to know the reference price”, he indicates.

This is how the blue and, given its characteristics, it is logical that it is a price very subject to “the impressions” that current economic and political events are generating in people, in savers, but it also responds to the price makers speculation of the dollar, to the interests of certain sectors that sometimes want to generate a climate of exchange instability. Despite its small size, many take it as a reference for this reason, because they consider it a reflection of the “feeling” of the City.