Tuesday, January 27, 2015

Argentina: Stuffing Our Pockets With Cash

Right before the new year, we crossed into Argentina for the first time. With each new country we enter, we face some of the exact same challenges. One of those is obtaining the proper currency, which is usually easily done through an ATM in the nearest border town. Easy, that is, until we entered Argentina. To be fair, we could've obtained Argentinian pesos by visiting an ATM in the usual manner, but that would have been fairly stupid on our part.

It would be stupid, not only because there are usually a dozen people in line, but because there is a black market for obtaining pesos that offers 50% more for your dollar. This market is known as the "blue dollar". It's a black market and therefore illegal but... it's kind of like going 50 miles per hour (mph) in a 45 mph zone - everyone does it!

Who is this shady dude?

The reason for the blue dollar is that Argentinians want their savings in dollars (or other "stable" foreign currency) rather than pesos. However, the legal process for doing this is cumbersome and sets a limit on the amount. Faced with annual inflation of around 25%, there is a strong motivation to bend the rules.

The method by which a tourist would obtain this higher rate of return on their dollar is to supposedly find a Casa de Cambio (House of Exchange) where the offical/legal rate will be posted, but the blue rate will be honored. We found things to be a little different, and quite a bit harder, because the small border towns in the south do not have Casas de Cambios (for the record, we crossed near Junin de Los Andes).

Pic courtesy of www.costalegre.ca

After many days of running around slyly asking people if they knew "where we could exchange our dollars (wink, wink)", we finally figured out the secret. Avoid the pharmacies. They offer the worst rates. The local insurance agent, while not being able to insure our foreign vehicle (argh!), gave us the best rate, but didn't have as much cash as we wanted. For some reason, the independently-owned auto-parts shops seem to be where it's at. At the shop where we exchanged the most dollars, things started out slowly. The owners were hush-hush and wanted to wait until all the other customers had left the shop. Once we had our backstreet casa de cambio all to ourselves, the owners negotiated a rate with us. After we exchanged our first $400 and walked out the door, one of the owners came running after us, asking if we could exchange another $500. Aren't you the guy who wouldn't do more than $400 just 2 minutes ago? Maybe it was our crisp, new Benjamins that lured him in.

Next thing we know, a young employee wants in on the action, and asks if we'll exchange more. Given his enthusiasm, we upped the rate and walked out of the shop feeling a bit exhilarated, and relieved to finally get it over with. My bra was stuffed with literally hundreds of bills. Good thing there's lots of room in there. Hopefully all these pesos that we have stashed throughout the truck won't lose too much value before we can spend them.

Just 4 years ago, a 100 peso bill would be worth $26. Today, it's officially worth $11 and only ~$8 at the blue rate.

For more information on the blue dollar:

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