Trust is a rare commodity in Argentine financial circles, having been eroded over decades of currency crises, pension fund seizures, bank freezes, and the repeated loss of savings earned over years by the common folk through processes that they had neither designed nor anticipated, and over which they had no control. The formal financial system has institutional memory of betrayal, so Argentines have a healthy distrust of every tool it provides, which is not irrational paranoia but rational updating of their expectations based on history, and a reasonable basis for caution by any measure.
Much of the foundation is due to the dollar relationship. Argentines have a relationship with the dynamics of the currency, which has become a structural fact of economic life, not an occasional distortion, as persistent inflation and the fact that the official exchange rate and the parallel exchange rate are very different have given them a peculiar relationship with the currency that is not the experience of most populations. Argentines also have a cultural tradition of saving in dollars passed down across generations. In a country where taxi drivers charge their fares in dollars, where real estate deals are carried out in foreign currency in cash, and where the blue dollar rate is followed as regularly as the weather, the people have developed a natural intuitive understanding of how the exchange rate works that in other countries formal learning takes years.
Buying and selling currencies with foreign brokers was a way around the capital controls and currency restrictions, which have at times complicated an easy way to save dollars in Argentina, or even prohibited it altogether. For traders with accounts opened with brokers regulated outside their home country’s banking system, the lure was to have dollar-denominated trading positions that would not be controlled by the domestic banking system, and which would, in the Argentine context, appeal more to the most elemental of all instincts: the preservation instinct that economic history has made a hallmark of Argentine financial conduct.
The infrastructure of the community around forex in Argentina was elaborated with a specificity that is related to the preoccupations of the local economy. Content creators who provide the explanation of the mechanics of currency pairing, from the perspective of the Argentine currency dynamics, of the path of the Argentine peso, of the dynamics of the international dollar, and of domestic monetary dynamics in relation to the strength of the international dollar, addressed an audience in which the interest in currency markets would never have been solely speculative. But a Buenos Aires trader following the EUR/USD pair is also implicitly following the broader dollar dynamic that impacts on the Argentine peso via the same global capital flow channels, and Argentine forex communities have a certain sophistication about those connections that communities in more financially conventional economies may not have to learn.
On the other hand, the Argentine forex market has not been a solved problem and is characterized by its regulatory complexity. The environment of foreign exchange transactions, capital controls, and the official handling of offshore financial accounts has evolved and imposed constant pressure on Argentine traders to stay on top of what is allowed by the rules of the game, and not enjoy the luxury of a predictable regulatory framework. Traders who take this complexity in stride and continue to do due diligence are more likely to maneuver it than those at either extreme.
In the eyes of Argentines who have taken the plunge into the forex world, one of the few financial tools that has been able to live up to its core promise is forex. This is not a simple stamp of approval on the instrument or an assurance that it poses no risk. This is a statement about the nature of trust in a setting where it has been violated over and over again, and why it extends to any financial product more readily than it would in a country where the basic assumption is that institutions are doing what they say they will do.