Argentinians Buy Dollars in Chile

In early January of this year, an article in Chile’s primary newspaper almost proudly touted the fact that Chile’s CLP had reached a new status in Argentina (the CLP is the name of the exchange rate used by anyone in Chile who needs to buy US dollars unofficially). Suddenly, the Chilean peso had achieved sufficient stature to be exchanged informally at multiples of ARS 1.03 to 1.21 for each CLP 1.

The reason for Argentinian interest in the CLP is the existence of exchange controls. Amongst the many issues that Argentines face is the fact that the ‘cepo’, a series of currency controls that have existed in the country since 2011, still exist.

The cepo is an official fixed exchange rate for a given currency against the Argentinean peso that is artificially low compared to reality. The Argentine government maintains multiple exchange rates, but the most common is the black- market dollar rate, also known as the ‘dólar blue’.