What you need to know about the US dollar exchange in Argentina
As confusing as it may sound, there are two dollar rates in Argentina — the normal rate and the blue dollar. Here’s the conversion rate of US dollars to Argentinian pesos as of today:
- Normal rate: $1 USD = 8.55 Argentinian Pesos
- Blue dollar: $1 USD = 13.55 Argentinian Pesos
The country lives with two conversions. The normal rate pretty much applies everywhere — banks, local exchange, etc. On the other hand, the blue dollar can be obtained in the black market. I didn’t understand this at first but it was explained to me this way: basically, the government thinks that the US Dollar should be lower but the majority doesn’t believe it. For example, if I try to your iPhone5 and the buyer says, “Okay, I’ll take it for $80.” Of course, you wouldn’t agree because obviously, an iPhone5 costs more, right?
Let’s make this brief. Before the 2001 crisis in Argentina, three crises converged:
Argentina was pegged to a 1=1 basis to the US dollar hoping that it would end hyperinflation but when Brazilian real devalued in 1999, investors found out that their dollar can buy more in Brazil than Argentina. With this, investors pulled up and Argentina’s foreign investments decreased.
When the government was under Carlos Menem (second term), there was an extensive borrowing and Menem’s administration acquired a lot of debt inside and outside of Argentina. This made domestic rates go higher. Credit became really expensive for businesses and that forced them to pull out and close their companies.
Through Menem’s term, a lot of people lost their jobs due to the closing of many private companies. The majority of these companies were utilities and this forced electricity, phone, etc to raise their prices. Domestic demand went downward. The government’s tax revenues shrink.
As a result, all these 3 crises converged in 2001 when people started believing that Argentinian peso would be less so they rushed to the banks to change them to dollars at a 1=1 rate. To avoid draining the banks, they made a withdrawal limit of $1,000 a month and this sparked even more anger to the Argentinians. There was a total riot — people protesting on the streets, people were killed, government officials resigned, etc.
After all the financial restrictions in the country in terms of dollar exchange, a black market emerged.
Like what I mentioned above, you can exchange your dollars in 2 different rates, normal and blue. From then on, foreigners found Argentina really cheap to travel to. With this, you can refer to how cheap Argentina is depending on what rate you are exchanging your dollars to.
Here are some helpful tips when traveling to Argentina:
1. Bring dollars/euros.
Though I have tried, it is highly impossible to get dollars at any banks nor Western Union (WU). I tried sending myself money through WU but there isn’t a “dollar” option when sending money through this channel. Which is odd considering I’ve used it in Brazil and they have a “send/receive in USD” option.
If you’re traveling Argentina for a month, it might not be ideal for you to bring tons of dollars or euros but if you are okay with the normal exchange, you can simply get cash from ATM machines. As for me, the big difference between the 2 rates hurts! I tried getting cash from the machines once and I felt the difference. Really huge.
2. You can withdraw USD in Bolivia or Uruguay.
Okay, this might sound crazy but just in case you didn’t know the dollar situation in Argentina beforehand, you can get cash from its neighbors, Bolivia and Uruguay. But then, who does that?! Well, Montevideo (Uruguay) is relatively close if you’re coming from Buenos Aires, but still, you have to pay for your fare to cross countries and dedicate time and energy. Again, who does that?!
3. Look for a trusted money changer.
As many tourists swarm Argentina, the exchange has been a business to many locals. You can find trusted money changers throughout the city but the underground exchange gives the best rate. You just have to be careful and don’t trust anyone with your dollars. It’s best to ask your hotel or a local for help especially if you don’t speak Spanish fluently. In this case, basic Spanish will not help you through.
Additionally, you can follow @DolarBlue on Twitter to get daily updates about the exchange rates. Above all the dollar shenanigan, Argentina is one of the most beautiful countries I have visited and I have gone beyond my means to enter the country, ergo visa requirements so might as well enjoy it, right?
Do you have any other tips to add when exchanging dollars in Argentina? Leave your comments below!