Argentina is one of the most beautiful countries in the world. It's got amazing people, great wine, and a rich culture that blends European and South American influences seamlessly. However, Argentina is going through some tough economic times right now. Inflation has been officially reported at an annual rate of 30% for several years and with widespread fears of an economic collapse – as in 2001 – many Argentines have been fleeing the native peso for the US dollar.
The government approved exchange rate is currently going for 5.7 Argentine Pesos to $1 at the time of this article. However, Argentines are so desperate to get their hands on dollars that there is a thriving "blue market" where the current exchange rate is 8.8 Pesos to $1. That spread of 3.1 pesos per dollar is consistent with a 54% premium over the government sanctioned exchange rate.
What this means to the intrepid traveler is a huge discount on all items purchased in Argentina and a great way to get around the country at a 50% discount.
A Primer for Taking Advantage of this Currency Arbitrage Opportunity:
-Take clean new US currency to Argentina. Keep in mind that $10,000 US is the maximum you can bring in without declaring it to customs and $100 bills are best for ease of transport as well as for the best exchange rates.
-Change your US bills at a reputable community bank (called cuevas) to get the "dollar blue" rate. Or ask your hotel for the most popular local exchange service. Avoid regular banks and/or money changers as they adhere to the unfavorable government rate.
-This is one of the few times not to use your points/miles earning credit cards in Argentina. You want to get that "Dolar Blue" rate, not the much lower government sanctioned rate. So despite all of your ingrained habits racking up miles on your credit card, in this instance use cash!
-Indulge in the fine wine, delicious cuisine and perhaps pick up a couple of famous custom made leather jackets for which Argentina is famous… all at a 50%+ discount!
In the future, I'll explain an even more effective way of using this incredible currency arbitrage opportunity to further stretch your travel dollar.
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About the author: Torsten is a serial entrepreneur who started almost a dozen ventures on four continents. Torsten's love for travel has brought him to 130+ countries and travel with most of the world's airlines. You can reach Torsten at [email protected]
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