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.