If you are going to Argentina you absolutely must know about their currency market before you arrive, it is unlike any other country I have been to. Most of the time I use my debit card for cash – take out the maximum every time to save on fees – then I use an international credit card for everything else. Argentina, however, is experiencing some financial challenges that make it hard for locals and travelers to bank like a normal developed nation.
Banking and government financial problems have plagued Argentina for the better part of three decades. In 2001 the government faced a sever debt crisis that closed banks overnight, caused mass riots and officials left office in disgrace, all while the Argentinean peso plummeted to half it’s value in less than one week. Around new years 2013/2014 Argentina again announced it would default on debts to the IMF and other lending nations. The constant uncertainty as to the ‘real’ value of the ARG Peso has created some practical implications for those traveling to and living in Argentina.
Two Exchange Rates
First is the “Bank rate” this practicing a “controlled float” where the government uses financial tools to maintain a stable $8.5 ARG to $1USD, it does not fluctuate If you use your credit card or debit card this is the rate you will get.
The second market is the “blue market rate” which fluctuates daily based on internal exchange rates, global demand for the USD. In the past two months travel the blue rate has ranged from $14ARG – $12ARG to $1 USD.
Why Two Markets?
First to stop capitol flight (people taking money out of the country lowering cash reserves and plunging Argentina further into international debt) the government has set up limitations on bank withdraws and artificially pegged the ARG peso to the USD with the $8.5ARG to $1USD bank rate. Argentineans can only take out a limited amount of cash at a time $5000 ARG ($588 USD at bank rate) and all withdraws are subject to bank fees in addition to government fees in some cases more than 10% of the withdrawal amount. Most big-ticket items are imported (like an i-phone, TV, airplane ticket, car, even houses) and therefore priced based in USD, or the $8.5 ARG exchange rate equivalent.
What does this mean for Argentinean’s?
Middle class Argentinean pay and savings are worth less globally every time the bank defaults and in order to maintain some trade balance inflation has become part of life. For example menu prices are written in pencil just to keep up with the almost weekly inflation adjustments. Argentineans who want to visit the US must have an itinerary, get government approval and then ask permission to exchange for USD from the bank. Someone from Buenos Aires gave me an example of a friend who was traveling to the US for work for 6 months and the government approved him for $400 USD. Argentineans can’t take out pesos, they can’t exchange for USD, and what ever savings they have is in a currency buoyed by a government every Argentinean I have met has described as corrupt. Locals would rather have USD stuffed in their mattress then savings in an Argentinean bank.
What does this mean for travelers?
First bring cash, USD $100 dollar bills, new and crisp. The blue market operates mostly in the open with “arbolitos” (translation ‘little trees’) that stand in tourist areas and in front of “cambio” offices (exchange) to change your USD at the blue market rate. Consult DolarBlue.net for rates as they change daily and are not up for haggling or debate when working with an ‘arbolito’.
This makes getting local currency feel more like a mission to score drugs. Take your cash, talk to a sleazy looking guy on the street that quickly trades your USD for ARG out of a wad of cash. The Blue Market rate is also only for $100USD bills. Try and change 5 x $20 and the rate drops. Recently I was quoted $12.8 ARG then when I handed him 5 x $20 USD I was told the rate for “this money” is only $12 ARG. Or ask really nice at your locally owned hostel, or rented apartment, give then a day or two notice to collect the ARG for your exchange.
Neighboring countries like Uruguay and Chile are prepared for USD seeking boarder crossers. For example ATM machines in Colonia de Sacramento (2 hour boat from Buenos Aires) will dispense Uruguay Peso’s and USD. Exchange offices are packed in border towns and it’s not uncommon for Argentineans to travel to Uruguay or Chile just to exchange for USD.
Know both rates!
You will likely be quoted for a hotel room in USD, then asked to pay in the local currency, be ready ask to pay in USD cash if they will honor the blue market rate. Book an apartment or hostel from a local instead of a chain hotel, pay in cash and or wire transfer direct your hosts international bank account (by paying in advance on AirBnb or Trip Advisor).
Don’t expect your credit card to work
It feels like every hotel I try to pay in credit card the machine is ‘broken’ or ‘no connection’ or my favorite “I know our website and the sign on the door and here at the desk all say we take Visa or MasterCard but really we don’t. You need to pay in cash, please” and good luck understanding any of this if you don’t speak Spanish. With the exception of internationally owned wineries around Mendoza my credit card has been useless here. Even if it did work establishments will charge anywhere from 5% to 10% additional fee just to use the card and you get the bank rate of $8.5 ARG to $1USD. Just give up and put your card back in your money belt.
- Bring $100 USD bills – about $800 per week
- Be prepared to seek out an ‘arbolito’ to exchange money
- If you are traveling for more than a few weeks, plan a mid-trip ‘mini-trip’ into Chile or Uruguay to get more USD.
- Ideally -learn enough Spanish to communicate with hotels and exchange ‘arbolitos’
That’s some great information Sara!!
Thanks Steve! Surprised that this currency information was not in Lonely Planet or other travel guides. It’s a big part of traveling in Argentina, and really how would you know? Glad you liked it.
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Nice Job! Can’t wait to read about Ecuador. Thanks also for the awesome review.
Lori – I had a blad at Tsafiki, in Las Tunas Ecuador, with you, heavenly place. A bit behind on blogging, but certainly have a lot to write about!
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