Why is Argentina's peso falling?
Argentina's peso lost most of its value through the 2010s and early 2020s, driven by persistent high inflation, government deficits financed by printing money, and low confidence in the currency. Strict currency controls and thin central-bank reserves widened the gap between the official and 'blue' dollar rates. Since 2025 the picture has changed: the government lifted most currency controls, the official-to-blue gap has nearly closed, and inflation has slowed sharply. The peso now moves within a managed trading band rather than collapsing, though it stays sensitive to political and economic shocks.
For years, prices rose fast, eroding what each peso could buy and dragging the exchange rate down with it. Inflation has slowed markedly since 2024, but remains high by global standards.
Governments long funded spending by creating new pesos, increasing the supply and weakening the currency. Since 2024 the government has run a budget surplus, easing this pressure.
When people expect the peso to keep losing value, they move into dollars, which adds to the pressure. Confidence improved as the gap between rates closed, though caution returns around elections and policy shifts.
For years, limits on buying dollars at the official rate fed the informal 'blue' market, where the peso traded even weaker. Most of these controls were lifted in 2025 and the gap has narrowed sharply.
Low central-bank dollar reserves made it hard to defend the peso when pressure built. Reserves have recovered substantially since the 2025 IMF deal, though economists still watch them closely.
See how far the peso has fallen on the live chart, or read the history of the peso and the latest peso news for the current picture.