I usually prefer to write more evergreen travel information, but I have had so many people ask me about money in Argentina, it’s worth taking the time to write this even if it is no longer valid in a few months or years. If you are planning a trip to Argentina, the first thing you need to understand is the unusual and unique money situation. I am not an economist so my understanding of the underlying theories is limited, so I won’t pretend to know more than I do.
Inflation is Rampant in Argentina
In the last five years, Argentina has averaged 49.18% inflation. From October 2021 to October 2022, the inflation rate was about 86%. The Argentinian peso (ARS) continues to lose value, which has led to the current complicated exchange rate situation.
As inflation increases prices in ARS go up, but the actual value/cost of items is not increasing to match. I was recently looking at reviews for a restaurant in Google, and a customer complained that the restaurant prices didn’t match the photo of the menu they’d looked at online, and in fact, the prices were 5x higher when they got to the restaurant. Something that was shown for 300 pesos actually cost 3600 pesos. The restaurant responded that the picture they’d looked at was a few years old, and the price increases were only to match inflation. Because of the decreased value of the peso, the price was actually the same when converted to U.S. Dollars or Euros.
Empanadas that are readily available all over Buenos Aires cost about $0.35 each, a bottle of water from a street vendor is $0.35-$0.65, a steak at a nice restaurant is $9-$18, depending on the cut of meat. So compared to U.S. prices, Argentina is very affordable. And even more so once you understand how to work the money. I have found the best way to gauge prices in Argentina is to convert the price in pesos to USD based on the rate at which I exchanged money; either the blue rate or the Western Union rate, discussed below. The conversion is important, and these same items, if bought with a credit card, would cost more.
What Does This Mean For Argentinians?
The extreme inflation means that the peso is constantly losing value, faster than cost of living is being adjusted. Many Argentinians are compensating by storing their savings in more stable, foreign currencies, such as U.S. dollars (USD) or Euros. So even if their pesos decrease in value, their money is kept in USD or Euros, and when they need more pesos, they can change those USD or Euros to pesos at whatever the current exchange rate is. *Obviously there are a lot of other effects of high inflation, but this is the piece that is relevant for this article*
What Does This Mean for Foreigners?
‘Okay, I’m just visiting, so why do I need to know all this?’ Good question. Because this combination of high inflation and residents storing their savings in USD and Euros has created the unusual exchange situation in Argentina: There are three different exchange rates. As a visitor you need to know this in order to get the best value for your money when you are visiting Argentina.
Official Exchange Rate
If you take money out of an ATM, or pay for something with your credit card, you will be charged the official exchange rate. As of the end of 2022, this is about 175 Argentinian Pesos (ARS) to $1 USD.
Blue Rate/Blue Dollar
If you exchange cash at an exchange house or Cambio, you will be given the blue rate. This fluctuates depending on the establishment but at the end of 2022, it is around 309 ARS to $1 USD. You’ll get the best rate by exchanging crisp, new, large denomination bills. New $100 USD bills will get you a better rate than $50s, $20s, or $10s. This blue rate exists because, as mentioned above, Argentinians like to store their savings in USD and Euros. But they only have access to bills brought in to the country by travelers. So, they are willing to pay a premium to get USD and Euro bills, hence the blue rate offering more pesos per dollar than the official rate. While this is technically the black market rate and not the legal exchange, it is the way most people exchange money. It is easy to find a place to exchange; tour guides, hotel concierges, Airbnb hosts can assist in finding a local exchange or connecting you to someone who will make the exchange for you. I used Instagram account @dolarpalermo. You contct them through Instagram’s messaging feature, and they sent someone to my apartment building to conduct the exchange. I also use them to check the blue rate since they post on Instagram stories what the will pay for USD. If you are looking for a place to pay the blue rate, I’d suggest shopping around a little to get the best rate you can find.
Western Union Rate
Western Unions are prevalent in Argentina. And for some reason that no one has been able to explain to me, the best rate for exchanging USD to ARS is to transfer money from your U.S. bank account/debit card to Western Union for in-person pickup. You download the Western Union app on your phone, set up a free account, and make the transfer, which is available almost immediately for pickup. You’ll get an email confirming your transfer is ready. It’s possible you’ll get a call from Western Union to confirm you made the transfer; this is their internal fraud protection and probably depends on your bank, but it doesn’t indicate a problem. The transaction fee is waived for the first transaction when you set up your account. When you go to pick up your money you may have to stand in line at a Western Union for a while depending on the day or time of day you go, but you’ll be rewarded with around 333 ARS for every $1 USD as of the end of 2022. Bring a bag though, because you’ll need to put those stack of cash bills somewhere!
But Can I Really Not Use a Credit Card or ATMs?
Yes, you can use your credit card. Unlike some countries, most restaurants and stores in Buenos Aires and other big Argentinian cities will be happy to take your credit card, though they will often give you a discount for using cash since they then avoid the credit card processing fees. And ATMs are readily available in big cities. So in an emergency yes, you can use your credit card. And if you want, you can withdraw money from an ATM. But both of those things will give you the official exchange rate. So it’s time for a little math. Here’s where things get weird, but stay with me…
Say you are paying for something that costs 5,000 ARS. If you pay with a credit card, you will get the official exchange rate (175 ARS), so your credit card will show a charge of about $28.57 USD (5,000/175), plus a possible foreign transaction fee, depending on your credit card. Same if you went to an ATM to withdraw cash, the 5,000 ARS you pay is the equivalent of $28.57 USD, and maybe ATM fees. If you exchange money at an exchange house and received the blue rate (~309 ARS), your purchase costs the equivalent of $16.18 USD (5,000/309). Finally, if you use money you picked up from a Western Union transferred at the WU rate (333 ARS), your purchase cost the equivalent of $15.02 USD (5,000/333). So by exchanging cash at an exchange house or using a Western Union transfer, the same 5,000 ARS item will cost you almost 50% less than if you used your credit card. Your dollar goes almost twice as far!
What About Online Purchases?
If you are pre-ordering tickets, or paying for hotels or flights, etc. online, it’s almost automatic to enter your credit card number. But, the same applies, you will be paying the official rate. Before you hit “pay” see if there is an option to pay by “Rapipago” or “PagoFacil” Both of these options will allow you to pay cash. These options will generate a receipt that you then take down the street to a store/kiosk/Western Union that has a Rapipago or PagoFacil sign. You show them your receipt, they scan the bar code, and then you pay them in ARS for the online purchase. They give you a receipt, and you should shortly get an email from the online merchant that your payment has been received. Or, find out if there’s a place in your city to pay cash for your purchase. I went to the airport in Buenos Aires to buy a plane ticket to Bariloche two weeks before my travel there, because I could pay cash for it at the airport. What would have cost me about $165 USD online only cost me about $90 USD because I paid cash at the airport!
What’s this Tourist Rate I’ve Read About?
In November 2022, the Argentinian government announced that foreign credit cards would begin getting the blue rate of exchange for ARS. All the tourists and digital nomads and expats cried “Hooray!” However, this new rate was announced on a Monday and was supposed to go into effect that Friday. It did not. Credit cards charges were still at the official exchange rate. The government then clarified that the banks had to actually make changes to enact the new rate. Then in December, it was announced again that this new rate was going into effect. As of the writing of this post in December 2022, it still has not gone into effect. It may have by the time you read this.
UPDATE: In the week since I published this post, I’ve heard (though I have not verified myself) that VISA credit cards are now giving a rate of about 300 ARS to $1 USD. Mastercards may be using the official rate, and then providing a refund later.
However, the underlying issue of inflation and locals storing their cash in USD and Euros will not have changed, and it is likely that the blue rate will eventually diverge again from this rate because people will still pay a premium for cash USD/Euros. The point being, check the blue rate and Western Union before going to an ATM or paying with your credit card.
In Conclusion
The whole landscape is confusing and really hard to wrap your head around until you are on the ground in Argentina. But once you are, it is a situation everyone is aware of and used to. Don’t carry all your money at once, but make sure you have enough cash for whatever spending you might do in a day. Take normal precautions and don’t wave a wad of money around. Everyone carries cash, including large bills, and any cashier will wait for you to count out your money to pay your bill. Many people will thank you for paying with exact change since small bills for making change are always in high demand. Overall, even if you use the official exchange rate, Argentina is very affordable. But your foreign currency will go much farther if you know about the money situation and maximize your exchange of USD or Euros for Argentinian pesos.
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