BUENOS AIRES — A shopping trip to Miami or a beach vacation in Brazil is far beyond Samuel Rivas’ budget. Nevertheless, the 57-year-old cabdriver was on a desperate hunt for foreign currency Wednesday in the Argentine capital’s financial district.
“It’s the only way I can make my money count — by buying dollars,” Mr. Rivas explained below the red digits flashing the Maguitur exchange office’s current values. “Because the day I want to trade in my car, if I saved in pesos, it’ll be totally devalued.”
His strategy — which has become a near-universal pastime in a country facing a 25 percent annual inflation rate and where everything including real estate and international airfare is priced in U.S. dollars — has turned into a crisis again in the past two weeks as the Argentine peso lost almost 18 percent of its value against the greenback.
The frustration on the streets is compounded because many Argentines thought they put such indignities in the rearview mirror with the election of center-right businessman Mauricio Macri as president in late 2015.
A 2001 government default was followed by 12 years of leftist rule that left Argentina struggling to rebuild its treasury and clean up its reputation in the global financial circle.
But the return of the currency bears and a sharp rise in the U.S. dollar have left Argentina — and a number of developing countries including Brazil, Mexico, South Africa and Russia — reeling again, desperately trying to bolster the value of their currencies without undermining local growth.
The issue has particular resonance here, with many Argentines talking of a “here we go again” feeling.
The dollar, worth just short of 21 pesos at the end of April, was selling this week for about 25 pesos. The decline was so steep that it unnerved locals long accustomed to the ever-weakening currency, which was once pegged to U.S. tender. On the day Mr. Macri was elected in December 2015, the dollar was worth barely over 9 pesos.
It also prompted a frenzied response from central bankers, who sought to prop up the peso by hiking interest rates by almost 13 points, to 40 percent, and by selling off some $9 billion in foreign currency reserves. The peso hit a historic low against the dollar on Monday, although there was faint sign it was firming up by Wednesday.
With a booming U.S. economy and the Federal Reserve raising interest rates, investor money that flooded into emerging markets such as Argentina is heading back to the U.S., putting huge pressure on countries that failed to prepare.
Carmen Reinhart, a Harvard economist specializing in international finance, turned heads this week when she told the Bloomberg News service that the emerging market economies are showing “more cracks now than they did five years ago and certainly at the time of the  global financial crisis.”
Mr. Macri, under increasing pressure 15 months ahead of a likely re-election bid, has acknowledged the anxiety, though he was quick to declare that the “currency turbulence” had been overcome.
“Clearly, what happened this week is that the world has decided that the velocity at which we had committed to reducing the fiscal deficit is not enough,” Mr. Macri told reporters at the Olivos presidential residence on Wednesday. “So we’ll need to speed things up.”
The president, a onetime business associate of Donald Trump whose acumen with money was supposed to be one of his strongest assets, has called for a grand bargain with opposition leftist lawmakers, governors and union leaders to further rein in deficit spending, which he insisted was the source of all of Argentina’s financial troubles.
For all the efforts of Buenos Aires to set its house in order and restore its good credit, recent events have been a sharp reminder of the country’s vulnerability to trends and forces beyond its borders and beyond its control.
“It’s a vulnerability because we depend on the world to lend us money, something we must change,” Mr. Macri said. “We Argentines have dragged along this problem, which weighs down all of society. So I believe it’s time to tell the truth: No more shortcuts, no more patches.”
Those words may well sound ominous to many overwhelmed Argentines who, in the wake of the administration’s cuts to government subsidies, have seen their utility bills and public transport costs triple or quadruple in a matter of months.
Mr. Macri’s May 8 decision to ask the International Monetary Fund for a $30 billion line of credit, ostensibly intended to inspire confidence, seems to have done just the opposite given Argentina’s troubled history with international lenders.
“It’s a sensitive topic [because] it reminds us … of somewhat traumatic experiences the country lived through,” said Mariano de Vedia, a political commentator for the La Nacion daily. “That doesn’t mean the [IMF] negotiations won’t be positive. But there’s an old saying: ‘He who scalded himself with milk cries when he sees a cow.’”
Popular unease is not enough of a reason to seek financing elsewhere, Mr. Macri insisted, especially because it could mean an additional $1 billion in interest per year.
“The [IMF] is a serious institution with which one makes good or bad deals; we’ll make a good deal,” Mr. Macri said. “We’re talking about hundreds of schools we can build, with the [savings] in interest, we’re talking about thousands of miles of freeway. … This must be a time of pragmatism.”
But to Emilio Massucco, who owns a small electronics store a few blocks from the Maguitur office, there is nothing pragmatic about looking to international powers that be to fix Argentina’s problems.
“I’d like for us to not depend on the dollar,” Mr. Massucco said while sitting in front of a rack adorned by a sizable Argentine flag. “I’d like for the country to be run in a way so as to not depend on the [IMF], of course, not depend on another country’s economy, especially that of the United States.”
While Mr. Macri praised his economic advisers Wednesday, the peso meltdown was affecting the wallets of bargain hunters along Florida Street, the busting Buenos Aires shopping mile where dozens of unlicensed money changers offer their services with their trademark, high-decibel cries of “Cambio, cambio.”
“You see it reflected in the value of a spare part of a cellphone, a tablet, whatever,” said Mr. Massucco, whose store sits inside the street’s Galeria Jardin electronics mall. “Buying from a wholesaler with a 30-day check means exacerbated dollar futures. … The dollar causes [price] hikes of all kinds.”
A day after the government gained some breathing room by avoiding a feared sell-off of short-term Lebac bonds, the 45-year-old entrepreneur’s confidence in official assurances that the worst is over was limited at best.
“The market has calmed down, and the Central Bank regulated things in some way,” Mr. Massucco said. “But even so, there still is latent instability and uncertainty.”
All but certain, though, is that the government’s annual inflation target of 15 percent — already boosted from the 10 percent estimate — has become wholly illusory. Unidentified officials warned this week that 20 percent and even 25 percent were more realistic objectives.
Amateur Milton Friedmans
The close link to inflation — and thus the costs of everyday products — is why ordinary Argentines keep a close eye on dollar values.
At the solidly named Sterling Cafe just five doors down from the Central Bank, Daniel Mendez Garcia sounded more like an economist than a coffee shop co-owner.
“You know what’s happening? You spend more. You have new price tags and old salaries,” Mr. Mendez said as he chatted with one of his regulars, a retired central banker. “Money in the street contracts, so there’s less in sales. It’s math; no need to be a guru [like] Milton Friedman.”
Unlike others, the 20-year coffee veteran insisted he won’t preemptively charge his customers more. But in a country with an $8 billion trade deficit, how much the peso is or isn’t worth will still make a difference.
“We only change the menu prices when they raise prices for me,” Mr. Mendez said. “[But] coffee will get more expensive now because it’s imported. There’s nothing you can do about it.”
In the meantime, halfhearted acknowledgments of errors — with Central Bank President Federico Sturzenegger conceding that markets were not “convinced” by his monetary policy and Mr. Macri faulting himself for being “too optimistic” — have done little to tame tempers.
“The self-criticism helps if you can gain something for the future,” Mr. Mendez said. “Otherwise, you can just commit hara-kiri.”
It’s advice Mr. Macri may want to heed if he wants to remain in office beyond October of next year, especially since voters have already shown an uncharacteristic amount of patience as they await his administration’s long-promised economic revival.
“In a way, [he] has been weakened; it just so happens that no other sector, party or candidate has tapped into this situation,” said Mr. de Vedia, the La Nacion analyst. “The [peso crisis] further delays the recovery, and that causes frustration and dissatisfaction.”
If any doubts remain as to just how present American legal tender is on Argentines’ minds, the president might do well do ditch his limousine and take a subway ride around Buenos Aires.
“Just 20 pesos,” a street vendor hawking ballpoint pens yelled on Wednesday in a crowded B line wagon: “If the dollar keeps rising on me, I don’t know for how much longer I’ll be able to sell them at 20 pesos.”