In Search Of: Cash in Argentina

Argentina has stunning natural beauty, stylish people, excellent Malbec and delicious ice cream in abundance. What they lack is smart monetary policy, at least from a tourist’s perspective.¹

Before leaving for Southeast Asia this morning, James and I decided to visit the ATM for more U.S. dollars cash, just in case, because we are now paranoid of running out of cash. 

This is what happened: We didn’t know about the differential between the Blue Dollar and the official exchange rate until we got to Argentina.² This differential meant that we would essentially pay double if we didn’t pay in U.S. cash or Argentine Pesos exchanged at the Blue Dollar rate. We are cheap, and hate wasting money by paying more than necessary. So instead, we wasted many frustrating hours trying to get cash. 

Instead of using ATMs and credit cards, we sent ourselves money using Remitly (which is designed for overseas remittances) and Western Union.³ But first we had to convince our bank that these were not fraudulent transactions. Then we had to find Western Union outlets that were 1) actually open; 2) had a system that was functioning; 3) had cash on hand. We traversed entire towns in search of places that met all three criteria. Then, we had to wait in long lines, along with Argentinians who were trying to pay their electric bills. And then the cash limits meant we sometimes still couldn’t get enough cash (glaciers hikes and penguin-watching are both activities run by monopoly providers and thus quite expensive). Luckily, Argentinians try to save in U.S. dollars, so our taxi driver, a tour company clerk, a baker and an airbnb host all were willing to exchange U.S. dollar bills for AR$ at almost the Blue Dollar rate. Unfortunately, we were not traveling with very many U.S. dollar bills. 

So sometimes, we just paid with a credit card through gritted teeth, knowing we were then paying 50% more. When all else failed, we went to an ATM, which eked out tiny sums of Argentine pesos at the official rate minus exorbitant transaction fees.

Thankfully, the pain of the entire experience was eased by decent Malbec that was only $3 per bottle!

¹Although I think economists also agree; just google: Argentina AND IMF.)

² Are you wondering why? I was too, and have now spent way too much time reading up on Argentinian economics. Long story short: history of hyperinflation + local mistrust of banks + currency restrictions = huge spread between official and black market exchange rates. The crazier thing is that this has been going on for years and is an open secret; newspapers and websites publish both the official and the unofficial “Blue Dollar” rates. As of January 2022, the official government-enforced exchange rate was about 100 Argentine pesos to 1 US dollar, whereas the supply-and-demand-based exchange rate is about 200 ARS to 1 USD. 

³For some odd reason, Western Union is not currently forced (like banks and credit card companies) to comply with the official government exchange rates.