The informal or “blue” dollar has skyrocketed to a record-breaking AR$359, its highest nominal value ever recorded. The Economy Ministry believes the leap is being driven by demand from small savers buying greenbacks in preparation for the upcoming tax amnesty, as well as seasonal demand.

The current value surpasses the previous record of AR$338 by over 20 pesos, which was set on July 22 in the aftermath of Economy Minister Martín Guzmán’s sudden resignation. However, the current peak is not as high as July’s jump in real terms because inflation between July and November was 31.8%.

Moreover, this week’s hike wasn’t caused by a political or an economical crisis, but rather seasonal fluctuations and the upcoming tax agreement with the US. According to sources in the Economy Ministry, the FATCA tax data sharing deal struck earlier this month with the US government, as well as the upcoming tax amnesty law, has driven up dollar demand from small and medium savers. 

The sources said a number of Argentine tax evaders have recently bought US dollars and plan to declare them through the amnesty. According to a draft of the bill viewed by the Buenos Aires Herald, this will protect people from legal consequences for tax evasion. The government believes this is driving demand for dollars even though the measure also applies to pesos.

To further illustrate this point, the sources add that the informal dollar also rose during August’s “construction amnesty law”, which created a framework to encourage tax evaders to invest in housing.

Sources at the Economy Ministry also believe the rise is seasonal, since a lot of major ‘cuevas’ [illegal money changers] are on vacation, reducing the supply of cash. In December, Argentine workers collect the second half of their aguinaldo [a thirteenth salary payment made in quotas in July and December] which also pushes the demand for dollars, as citizens seek to protect their savings from inflation.

For now, this variation is only reflected in the informal dollar, not the financial exchange rates. The source said the spike was expected to ease during the Argentine summer.