We had heard of currency issues in Argentina from some of the Argentine travelers we had met on the way. The Argentine peso is pegged artificially to the dollar to stop devaluation. Last year, the Argentine government started making it really hard to convert pesos to dollars. People wanting to travel abroad could not use their credit cards outside easily and most had to resort to buying dollars on the black market. The unofficial dollar called the ‘blue dollar’ is a hot commodity.
For travelers visiting Argentina this means things are more expensive than what they would be if the peso was trading at a market driven REAL exchange rate. Everyone advised us to carry as much currency (any currency, preferably dollars) as we can to Argentina and exchange money at the unofficial rate on the street.
We didn’t think it was wise to carry a lot of cash while in Brazil (before crossing to Argentina) and we were also skeptical about dealing with folks exchanging currency in the dark corners. We also believed that the difference between the REAL and OFFICIAL rate would be too negligible to make much of a difference. But once in Argentina, we realized that we had underestimated the situation. When we were there the official rate was about 5 pesos to a dollar while on the street it was close to 8 pesos to a dollar – that’s 60% difference.
Barring some skeptical or ignorant travelers like us, it seemed like the ‘blue dollar’ was the de facto currency. You could easily exchange currencies at the unofficial rate. Even most of the stores were accepting any currency at a rate somewhere between the official and unofficial market rate. For the first few days, we were still skeptic and were using the official rate (by taking money out of ATMs or paying by credit card). But then a fellow traveler introduced us to Xoom.com. Xoom allows you to transfer money to an agent anywhere in the world (much like Moneygram and Western Union) and it paid off at a rate very close to the unofficial rate. So we decided to give it a go. It’s an easy process – you transfer money to yourself (from a bank account or credit card) plus a transaction fee and then go pick it up at an authorized agent. By our calculation, we saved about $750 using this method during our stay there.
At the unofficial exchange rate, Argentina is a very affordable destination (excluding transport) – even cheaper than Peru. So anyone thinking of visiting Argentina, now may be a good time. The ‘blue dollar’ just crossed the 10 peso mark (called the Messy Barrier – it’s a football reference) in May 2013.
You can take a stash of dollars with you or use Xoom.com. And you won’t have to go around town to find someone to exchange money for you – they will find YOU. These guys are everywhere – you can’t escape the constant barrage of ‘Cambio, cambio, cambio’ on every major street in every major city.
We still have some Argentine currency left. Once outside Argentina, no one would exchange the pesos at the official rate (which is now about half the market rate). So we are just going to carry them back to the States and see what kind of rate we get there. If not, we have ourselves a good souvenir from Argentina…