U.S. corporates with Argentine peso exposure have been denied a payout on more than USD1 billion in non-deliverable forwards after an emerging markets trade group stopped publishing a daily forward dollar/peso rate because of the Latin American country's economic meltdown. The Emerging Markets Traders Association suspended publication of the daily rate on Dec. 21, but the situation has only now turned critical since the markets have reopened following the year-end holidays, according to fx traders in New York.
"It's just a bad situation and things are very confused right now," said Aviva Werner, a derivatives and non-deliverable forwards specialist at the EMTA in New York. The situation could become clearer in the coming weeks, but meanwhile the corporates will have to continue to wait. "Somehow they'll get paid, but the big question is at what rate," she noted.
As DW was going to press Friday press reports stated that Argentina's new caretaker president, Eduardo Duhalde, has announced plans to devalue the peso.