From the archives: A note on the money situation
Because Argentina's economy is totally baffling
At the risk of boring my two readers already, I have to talk about the money situation here in Argentina – it’s completely bonkers. Inflation is rising month on month – more than 140 per cent in the past year – so it’s all a mess. We got a shock when we first arrived because we were using the official exchange rate (used, in theory, but banks, businesses, any international payments) which works out at about 350 pesos to the pound and makes things expensive, even for us Londoners.
Then there’s the unofficial “blue rate”, which is the exchange rate used by pretty much everybody and relies on the predominant use of cash. Here, cash really is king – a lot of shops and bus stations will offer a discount for cash payments over card. The blue rate works out (at the time of writing) about 1,000 pesos to the pound – an easy conversion that means we get three times as many pesos than if we were to exchange using the bank’s official rate.
To get blue rate pesos, you either need to know a guy, or take a slightly hairy walk down Florida street in Buenos Aires where black market dealers lurk in corners calling out “cambio” (exchange). Should you take one of these shady dudes up on their offer, they will take you into a back office somewhere to do the exchange away from the eyes of police officers, though from what we saw I don’t think the police could care less. It sounds dodgy as hell. But this exchange process has gone from being something heavily warned against in the guide books to a very regular interaction, used by just about everyone in the country and only slightly sketchy. Of course, to exchange cash you really need US dollars, the international king of all currencies and the one many Latin American countries peg their own economies to.
Dollars are in especially high demand right now in the run up to the presidential elections – nobody can predict what will happen to the value of the peso if either candidate wins, and buying up dollars is the safest way for people to attempt to secure their savings. Right-wing candidate Javier Milei has promised dramatic economic changes, ultimately pledging to dollarise the country and get rid of pesos altogether. That could strengthen Argentina’s economy in the long term, but his policies could be too spooky for international markets in the first instance and cause a temporary crash, so some people warn.
Sergio Massa, the centre-left candidate who is also the former chief of cabinet, could bring about stability, but then again the government has been so badly criticised for its mishandling of the economy – and widespread corruption – over the past decade that a win from Massa could also trigger distrust and cause the market to crash.
On the night we arrived in Buenos Aires, it was very late and we were yet to get a handle on the currency situation, so we paid for our room in dollars. The next day, when I went to ask about exchanging our dollars for a better rate, we discovered the hotel did its very own black market dealing behind the front desk, and we were very quickly sold pesos at the blue rate. If only I’d asked sooner, huh.
An alternative to all this under-the-counter dealing is Western Union, which famously has a kiosk in every town, city and backwater, and offers a very competitive exchange rate that’s almost as good as the cambio guys on the street. For anyone unfamiliar, you can send yourself money online and pick it up in cash in store. It means you avoid being stung by banking fees, but there’s still a small charge after your first Western Union exchange. Once the dollars ran dry and we began planning our next moves out of Buenos Aires, we started using it for ease – I’d say with a 50:50 success rate.
In the days leading up to the election, queues outside Western Union spanned around entire blocks. Kiosks were either closed by the time we got there or had run out of cash entirely. One morning in Mendoza, Dave and I walked miles trying different Western Union places marked on the map. On the third or fourth try, we were in luck, but the kiosk could only give us our cash in 100 peso notes – the equivalent of 10p. Given that we were taking out a couple of hundred pounds’ worth to last us a few days, I felt like a bank robber with my backpack filled with notes, and very exposed.
The upside to all of this is that once we have cash to hand, Argentina feels incredibly cheap. Returning to Europe, whenever that happens, will be a shock to the system after 85p pints and glasses of wine.
Some highlights from Buenos Aires so far: a very lazy photo story
Spooky graveyard, feat Evita and some definite evidence of vampires.
Strong bookshop game.
Boca stadium: came for the big silly stadium, stayed for the many life-sized Maradona and Pope mannikin pairs.
An Eduardo Gomez exhibition
Bars, bars, bars and restaurants.