Money in Argentina

Posted by on May 10, 2013

Money in Argentina

Argentina has had a turbulent and unpredictable economic past and in 2001 it defaulted on a $132,000,000,000 loan, which plunged it into financial chaos once again. This boom-bust cycle (which seems to happen everywhere under capitalism) is particularly acute in Argentina and the people are scarred by the memory. Here the only true currency is gold, property or US dollars. After the re-election of Christina Kirchner in 2011, the government imposed tight foreign currency controls, limiting, and in effect, banning the purchase of US dollars in Argentina. Cooked government data can’t be trusted, leaving real inflation estimation in the region of 25-30 per anum making the Argentinean peso worthless for saving.

There are two rates of exchange for US dollars in Argentina. The official rate, which at time of writing is 5.17 pesos per dollar and the unofficial ‘blue’ market rate which when I arrived in Argentina was 7.5-8. At time of writing it has reached 10.45 and is expected to climb. The best advice anyone can give you is ‘bring dollars to Argentina’ and you can take advantage of this sad state of affairs. It’s true. Most people will change your dollars if you mention you have them. If you can’t find someone, take a walk along Paseo Florida close to the Plaza de Mayo and there you will find at least 10-20! I changed for 7 in Bariloche, 8 with a friend in Buenos Aires, and 8.5 with a street vendor. I expect I could get 9.5 now (10-05-2013). Caution! Fake bills are about so ask someone how to verify them.

If you fall short on dollars, make the crossing to Uruguay. Don’t go just for the dollars! That’s what I did the first time and really regretted the short stay. Colonia del Sacramento is only 60kms from Buenos Aires on the other side of the Río de la Plata, and for about 350 pesos you can go there and back. In Uruguay you can withdraw US dollars from the ATM. I’ll write about Colonia in my posts on Uruguay but suffice to say it is worth staying a few days, and perhaps even going on to Montevideo and other parts of the country.

Public transport is very cheap, food is cheaper and hostels are too. How cheap it is depends on your rate of exchange for dollars of course. There are coins of 5, 10, 25, 50 centavos, 1 & 2 pesos and notes of 2, 5, 10, 20, 50 and 100 pesos. The largest bill you can get equivalent to about 10 dollars (and falling comparatively).

One cannot obtain dollars in Argentina through official channels. For Argentineans wanting to travel abroad, they can apply to AFIP, the central government authority for authorisation to obtain dollars from their bank. Usually the amounts are very small and insufficient for travel expenditure. Foreigners can only obtain dollars through a bank with authorisation of AFIP equal to the amount they had changed into pesos upon entering the country if they have the receipt of exchange. If not, tough luck. The existence of two exchange rates for dollars in Argentina means that obtaining dollars through official channels enables for there purchase at the lower official rate of 5.17 with the option of selling them at (at time of writing) 100% profit on the black market. External currency controls in Argentina are very tight.

As much as you may not like to arrive with US1000 in cash (depending on how long your stay is), it is well worth it. Only, divide up the sums and store them in different places and don’t change it all at once.