Argentina Parallel Exchange Rate: Navigating the Complex Currency Market

Argentina's parallel exchange rate is a complex and sensitive topic, with the official exchange rate being artificially kept low by the government.

The official exchange rate is around 80-90 pesos per US dollar, but the parallel exchange rate can be as high as 200-300 pesos per US dollar, making it difficult for people to afford basic necessities.

This disparity has led to a thriving black market for currency exchange, where individuals and businesses can buy and sell dollars at the higher parallel rate.

The government's policies have been criticized for exacerbating the problem, with some economists arguing that the artificially low official rate has discouraged investment and hindered economic growth.

Javier Milei took office as the new president of Argentina on December 10, 2023, with a promise to make extreme monetary policy changes.

His first action was to devalue the official currency from 366 pesos to 800 pesos to the dollar.

Prices have been increasing every single day since he took office, affecting locals the most.

Expect things to get more expensive, with prices continuing to rise as of October 2024.

It will take some years to create the conditions to even consider dollarizing the economy, if it happens at all.

You can exchange your money for Argentine Pesos in various ways, but it's essential to know the different options and their rates. You can exchange your cash in one of the many exchange offices in the city, but some USD or EUR banknotes are not accepted or have a lower exchange rate.

To get the best exchange rate, consider using Western Union, which offers a rate similar to the "blue dollar" rate on the black market. Another option is to use a credit card, which can give you a preferential rate, known as the Dólar MEP, for Visa and Mastercard purchases. This rate is currently trading at 376 Argentine pesos per dollar, which is on par with the black market rate.

If you're planning to use your credit card, make sure to check if your card has foreign transaction fees, as they can run users an additional 15% to 25%. You can also consider using a card without foreign transaction fees, like Charles Schwab.

The official currency in Argentina is the Argentine Peso, but it's often denoted with the same sign as the dollar, $, which is differentiated as U$100 vs $100 [Pesos]. The peso is struggling with high inflation, making it best to use exchanged Argentine pesos within the country.

Argentines have a long history of preferring to pay in US dollars due to the country's volatile economy, which pushes many to "invest" in US dollars as a way to keep their savings stable and safe from inflation. This puts an unhealthy and unnatural demand on foreign currency and depreciates the peso.

You can pay with the Argentine peso throughout the country, but it's common to see US dollars accepted as well, especially in tourist areas. If you want to pay in USD, it's essential to be aware of the high inflation rate in Argentina.

The official value of the peso was not free floating with the market, and the government has imposed restrictions limiting how many USD Argentina citizens could purchase from the bank each month. This creates a parallel exchange rate, referred to as the blue dollar.

The blue dollar is an unofficial exchange rate that depends on supply and demand, making it higher than the official exchange rate. These transactions are done in cash, which entails risks, so it's recommended to be well-prepared when visiting areas like Calle Florida.

In Argentina, you'll find multiple exchange rates, including the official rate, the blue rate, and the MEP rate. The official rate is set by the national bank, but it's often not the best option for tourists.

You can exchange your money at various locations, including exchange offices, banks, and Western Union. Western Union is a popular option, offering a rate similar to the blue rate.

To get the best exchange rate, it's essential to be prepared. Bring crisp, unmarked $100 bills, as these are often preferred by exchange offices.

Here are some exchange options to consider:

Keep in mind that some exchange options may have restrictions or requirements. For example, some exchange offices may not accept smaller bills or worn-out currency.

If you're planning to use your credit card, you'll be happy to know that tourist credit cards now have a preferential rate, known as the Dólar MEP. This rate is currently trading at 376 Argentine pesos per dollar, which is close to the black market rate.

To avoid needing cash, consider pre-booking your airport transfer or accommodations, which can be paid for in advance. This will help you avoid exchanging money upon arrival.

Exchanging money in Argentina can be a daunting task, but with the right knowledge, you can navigate the system with ease. The official exchange rate is set by the national bank, but there's also a parallel unofficial exchange rate, known as the "blue dollar", which is often more favorable.

To get the best exchange rate, it's essential to understand the different rates available. The official exchange rate is known as the "Dolar oficial", while the parallel unofficial rate is called the "Dolar blue." There's also the "Dolar MEP" rate, which is similar to the blue rate and is used when you use a foreign Visa or Mastercard in Argentina.

The difference between the two rates can be significant, with the blue rate often being around $1250 pesos to the dollar, compared to the official rate of around $950 pesos. However, the rates can fluctuate, so it's crucial to check them regularly.

To exchange your money, you can use an exchange office in the city, but be sure to bring crisp $100 bills, as these are often accepted more easily. If using an ATM, look for the LINK sticker, as these ATMs tend to have smaller fees than other chains.

Here are the different exchange rates to keep an eye on:

When exchanging money, it's also essential to be aware of the fees associated with using ATMs. Some banks, like Charles Schwab, refund ATM fees, making it a more cost-effective option. However, the limit on the amount of cash you can get out is often low, and the fees can add up quickly.

In some cases, tourists may opt for using a "cueva" (a black market exchange) to get a better rate, but this is not recommended, as the rates are often not much better than those offered by Western Union.