One of the Steam marketplace’s most important features is its ability to accept local currencies from countries around the world. Valve has done a ton of leg work to make that happen, which opens up the potential for games to find new audiences. But dealing with multiple world currencies means that you sometimes have to deal with instability. And that’s what is happening in Argentina right now. In response, Valve is no longer accepting the local Argentinian peso.
Steam Database, a site that tracks changes to the game-distribution service, first noticed the change. If you attempt to purchase a game in Argentina, you should now see this message:
“Due to recent changes to government laws in your region, we are unable to offer local payment methods for checkout at the current time.”
So what changes have made Valve pull out of the Argentinian peso? Well, it likely has to do with a number of factors that all trace back to the instability of the country’s currency.
The peso’s value dropped 33 percent to 60.24 pesos per U.S. dollar from August 11 to August 15. The exchange rate is now 55 pesos per U.S. dollar. But Valve and even the International Monetary Fund are worried about the potential for the peso to drop even further.
The big drop in the value of the peso came after Argentina’s latest presidential primary election. Current president Mauricio Macri lost to a ticket that includes Alberto Fernandez and running-mate (and former president) Cristina Kirchner.
And now investors and the IMF are concerned that Fernandez/Kirchner will end Macri’s economic policies. Macri has the country working closely with the IMF. And many investors saw this as a good sign that things were going to improve.
Argentina has $56 billion in foreign-currency debt with the IMF.
The concern, according to a Business Insider report, is that Fernandez could default on that payment. He will probably not seem as inviting to international investors. Fernandez has said that it’s “impossible” for Argentina to pay back the loan on time. That suggests, at a minimum, he would attempt to renegotiate the loan.
When Fernandez won the primary, the S&P Merval Index of Argentinian stocks dropped from 44,355.09 to 27,530.80. That’s a 48% drop, and one of the biggest collapses for any stock index ever.
Now, credit-rating agencies are downgrading their rating for Argentina, which means they believe it is less likely that the country will repay its debt. And the IMF is sending a team to the country to meet with the finance minister.
Steam could lose a lot of money dealing in local Argentinian currency
Valve is seeing the S&P Merval drop. It’s seeing the peso lose value. And it’s getting the notice that agencies are downgrading the country’s credit rating.
To avoid losing money if the peso completely craters, Valve is no longer accepting the currency. And that is exactly the problem that Argentina faces. PC gaming fans in the country can still purchase games on Steam. But they have to use an accepted currency like U.S. dollars. And that could drive down the value of the peso even further.