Argentina’s infamous “blue chip” or black market dollar exchange rate – known locally as “dólar blue” – has served as a fear gauge over the past few decades. At least since the latest batch of currency controls were put in place, first by Cristina Fernández de Kirchner, temporarily suspended and later redeployed by Mauricio Macri, and later extended by both Alberto Fernández and Javier Milei. The blue peso-dollar exchange rate has gone through multiple mutations, at some points being considered illegal by governments that sought to mask the inefficiencies of their economic policies — namely the Fernández-Fernández administration during Sergio Massa’s heyday at the Economy Ministry, along with Cristina Fernández de Kirchner’s previous government. But it has always retained certain forecasting capabilities, particularly when Argentina gets out of control.
The Milei administration, with Luis ‘Toto’ Caputo at the helm in the electric chair that is the Economy Ministry, had managed to tame the “blue,” bringing the spread with the official exchange rate down considerably and keeping it there throughout the majority of the President’s first year in office. But as the tectonic plates begin to slide past each other, though, the “blue” starts to move again and things get hairy.
Caputo has added fuel to the fire by sparking further uncertainty over recent weeks when referring to the potential new deal with the International Monetary Fund (IMF), failing to ease the market’s worries regarding the fate of currency controls (i.e. "cepo") and therefore the Milei administration’s exchange rate policy. He jumped the gun (on purpose?), announcing a US$20-billion IMF deal that wasn’t yet confirmed by the multilateral institutions, despite a Thursday statement by Fund Spokesperson Julie Kozack indicating that fresh funds involved in the new programme would be substantial. Given the psychological importance of the value of the dollar in Argentina, the “blue” can have an amazing influence and those who operate in that subterranean domain on the verge of legality can become exponentially rich one day, only to fall from grace the next.
One such case recently made it to the headlines in bombastic fashion. Elías Piccirillo, the latest “King of the Blue,” was arrested in the exclusive gated community of El Yate, in Nordelta, after apparently being tipped off as to the presence of the security forces looking to detain him. Video footage shows him apparently running away in his underwear, which, according to journalist Daniel Bilotta, was an attempt to delay the arrest until his lawyer was present. Piccirillo jumped to fame in May 2024 when he wed Jesica Cirio, a superstar model and fitness entrepreneur who at the time had recently ended her relationship with Martín Insaurralde, the former mayor of Lomas de Zamora, a Peronist bastion in the metropolitan region of Buenos Aires.
Cirio seemed to be a victim in Insaurralde’s epic downfall, who was revealed to have spent lavishly on taking his lover, professional escort Sofia Clerici, on board a yacht named “Bandido” during a hidden escape to the Spanish resort town of Marbella, on the Costa del Sol. Insaurralde, a Peronist golden boy under Cristina’s wing, was quickly accused of corruption and investigated for his supposed ties with the gaming industry in his territory. The investigation indicates that he spent some 14,000 euros to rent the yacht. Not long after, Piccirillo was taking his ex-wife Cirio aboard super yacht “Bold,” for which he spent 1.3 million euros, according to journalist Carlos Pagni. Someone needed to show off (and someone quickly needed to find a new ‘partner-in-crime,’ so to speak).
Only a few years ago, Piccirillo was a real-estate agent for property firm Remax. He got his start when his mother got him a job at a call centre in the humble municipality of Florencia Varela, then he went on to work in real estate and made his big break in the financial underworld of “cuevas financieras,” which translates directly into “financial caves.” This is where the “blue” comes to life – it is in these shady outposts of the Argentine financial system where somewhere between two to five percent of the daily volume of currency market transactions nationwide occur. From individuals looking to secure the value of their earnings in the context of currency controls, to firms looking to clean “black” funds used to avoid the heavy burden of taxes, to drug-traffickers and corrupt politicians… they all participate in the “blue” market. Even tourists walking the streets of downtown Buenos Aires can see the “arbolitos” or exchange rate traders looking for clients.
Piccirillo was arrested for allegedly planting a 0.9mm-calibre pistol and more than a kilo of cocaine in the car of Fráncisco Hauque, another shady character who was arrested for alleged possession of narcotics and firearms upon their discovery. Hauque immediately accused Piccirillo and Cirio of setting him up, ultimately getting federal judge María Eugenia Capuchetti to investigate and arrest Picirrillo and another seven people – all of them members of the Buenos Aires City Police Force for the attempt to frame Hauque, who spent a few months behind bars.
Hauque, it’s worth noting, is no angel either, as he was one of the main players behind the crypto-based Ponzi scheme named Coinx World, which at one point was promoted by Javier Milei (before taking office as head of state). If the ‘$LIBRA’ scandal is beginning to ring a bell, it’s no coincidence. Hauque blames Piccirillo for scamming him to the tune of US$6 million – the “King” says he paid back and was later extorted for even more. What else will surface from the Piccirillo-Hauque affair, particularly once the courts open his safety boxes and potentially unlock his personal devices?
The sketchy “tales of the blue” stretch throughout and across Argentina’s economy. Indeed, in the context of brutal inflation and decades of currency controls, it was one of the only ways in which Argentines could seek some level of protection against the destruction in value of recent years, along with cryptocurrencies. Yet, when corruption is endemic and is ultimately exposed, it is usually revealed that the perpetrators generally had some level of access to hard currency, in the form of US dollars. For example, suspended Entre Ríos Province Senator Edgardo Kuieder, who was caught red-handed crossing the border to Paraguay with US$210,000 in cash (a video of him counting dollars and distributing them in multiple envelopes was recently leaked) is another graphic example of the power of the greenback. Going further back, images of the Kirchnerite former Public Works secretary José López with duffel bags and a semi-automatic rifle hiding the money in a convent marked an era in the public’s perception of state-run corruption, along with the Lázaro Baéz case and videos of his operator, Leandro Fariña, counting money in “La Rosadita.”
Milei and Caputo have promised to lift the "cepo" currency controls, which is tied to the final details of the IMF negotiations. It won’t signal the end of the “blue,” but it should reduce its importance and the wild fluctuations that voraciously mint millionaires and, at the same speed, erase their fortunes. Until then, they will be forced to remain vigilant of the “fear gauge.”
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