Please note that this article addresses a particular aspect of the Argentine economy pertinent to tourists. It is not meant in any way to make light of the very real economic issues faced by locals, especially those who struggle to begin with.
When traveling, the subject of how to exchange currency can have some complications. Some people prefer to use a money changing service (a bank or a currency exchange kiosk at an airport or in a foreign city). Others – I am one of these – prefer to use an ATM, thereby getting the exact exchange rate at the moment. Well, in Argentina, things are a lot more complicated.
You see, Argentina has two exchange rates. One is the official rate. This is what one will get from an ATM or a bank. The other is what is called the “blue” rate, or just the “blue dollar.” Named for the blue stripe on newer US $100 bills, it is the premium Argentine people put on American hard currency, and will often get a higher exchange rate.
I know this sounds weird, so a bit of history. In 1992, Argentina relaunched their currency, the peso. A new peso was worth about 10 trillion of the old pesos, which gives you an idea of how inflation was here prior to then. The goal was to tie the new currency in to the US dollar, with pesos specifically matched to dollars held by Argentina’s national bank, at a 1-1 exchange. For a while, that stuck.
By 2002, the peso had dropped to roughly three to the dollar as Argentina relaxed their standard of having US dollars in reserve. In 2011, with the rate at roughly six to the dollar, in an effort to curb Argentine capital flight (those who would convert their pesos into foreign currencies believing them to be more stable) Argentina introduced new measures to prevent locals from purchasing foreign currency legally, and so the blue dollar was born, whereby a sort of black market was created for the purchase of US dollars.
The peso continued to decline in value, as Argentina’s inflation rate since 1992 has averaged almost 25%, and has routinely topped 40% most years since 2014. (In 2023, the inflation rate is more than 100%.) In 2015, pesos were ten to the dollar. In April 2023, as of my trip to Buenos Aires, the official exchange rate is 216 pesos to the dollar.
And that is only the official rate. With inflation the way it is, dollars are even more in demand. The current blue rate is a whopping 407 pesos per dollar, representing an 88% markup! (Since writing, that has gone up up 488, with the actual exchange rate at 233, so the blue dollar is outpacing even this crazy inflation.)
So what does this mean for tourists? Well, let’s start with the practical aspect of how to exchange your dollars into pesos to get the blue rate, since banks and ATMs will still use the official rate. Option number one: bring US cash and exchange it at a cambio, an exchange outlet. They hover between legal and not; basically, they are accepted despite not quite being fully above boards. Rates can vary a bit, and apparently you’ll receive a better rate for brand new $100 bills than for worn or smaller currency. Walking down the pedestrian Florida Street in Buenos Aires’ central district, you’ll hear people calling cambio every several feet it seems.
Option number two: wire yourself money with Western Union. This was the method I chose. Basically, with a small ($9) fee, I can wire myself dollars and Western Union will exchange that into pesos at the blue rate, which I can then pick up at any Western Union outlet in the country. Here in Buenos Aires, there are a ton. Just make sure to get there early, as lines of both tourists and locals using the service can cause them to run out of cash.
Option number three: use an American credit card. In November 2022, the government introduced an officially sanctioned “tourist dollar,” which closely mirrors the blue rate. If you use your American Visa or Mastercard, and pay in pesos, a few days following your purchase, the rate will be adjusted to reflect the blue dollar. (On my statement, purchases showed as pending for longer while that conversation was made, but it ended up happening.)
Practical consideration for tourists number two: things here can be incredibly cheap. With a blue dollar rate nearly double the official exchange rate, and with prices here being a bit lower anyway, there are some amazing deals to be had. Take street food, where a recent lovely lunch of two empanadas cost me 320 pesos, or less than a dollar. A jar of the best dulce de leche I’ve ever had? 1300 pesos, or just over $3. (These prices have gone up since this writing. Even during the month I spent in BA, things like the subway increased from 58 pesos for a one-way trip to 67. It’s truly crazy.)
Finally, there is one more practical consideration. Argentine bills currently max at a 1000 peso note. Before I arrived, I transferred $200 via Western Union, for just over 81,000 pesos. In 1000 peso notes, that’s a huge stack, and that was a small amount of American dollars to transfer. Petty theft is a big deal in Buenos Aires, and carrying stacks of pesos, or of US dollars if one decides to use a cambio and brings cash, feels weird and unsafe to me, even if only for the few blocks between Western Union and the safe in my flat. Just be cautious.
It is impossible to guess where the exchange rate will go from here. I find it hard to believe it will continue to skyrocket. After all, Argentina has the 23rd largest economy in the world. But I’d probably have said that a couple years ago, too. One thing that is probable is that the blue dollar is here to stay, although whether the credit card rate remains will be interesting to see. And with your dollar stretching so far, now is a great time to visit Argentina!
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2 thoughts on “Argentina’s Blue Dollar”
Interesting. As I began reading my first thought was- are both rates legal? A sensitively written post, these issues exist for visitors despite what may be happening in the wider economy.
Yes, both rates are legal, especially when you consider the credit card version is government ordered