Argentine forex law gives birth to black market

Published on : Sunday, January 26, 2014

download-314Argentine pesos are at the top of the world. Tourists in Argentina are suddenly finding their money will go a lot further than it did just a few days ago. The peso has gone into freefall, plummeting just over 17% against the dollar in two days.

Since the country’s government introduced tough currency change restrictions on its people, a black market has emerged. In short, you can change your money at an official outlet for one price; or you can go to an unofficial trader and get it changed at the “blue” rate – which will put many more pesos in your pocket. Taking plenty of hard cash contradicts the usual advice to tourists travelling abroad, but many visitors to Argentina have been doing just that to take advantage of the black market rates.

As an example, a seven-course tasting menu at HG Restaurant at the Fierro Hotel in Palermo, named as one of the 50 best restaurants in Latin America in 2013, now costs £27 compared with £36 a month ago.

Hotelier Martin Rosberg, who runs the Fierro Hotel where the restaurant is based, explains: “Argentina has suddenly got cheaper – and that’s with the official rate, not the blue rate.”

Numerous websites and Twitter accounts have emerged to keep visitors and locals up-to-date on the two parallel rates, such as @DolarBlue. Even newspapers report on the two, side by side. “I’ve stood behind tourists in the bank, watching them hand over dollars to change them at official rate, and wanted to scream, Noooooo!” says one expat, who has been working in Buenos Aires for over 10 years.

So how do you track down the more favourable blue rate? Many foreign visitors set up a local contact who can make the change, or ask their hotel to recommend a “cueva” (literally meaning cave; in reality, more like fully functioning businesses, accepting dollars, euros and pounds). Other tourists simply head to central shopping streets and respond to not-so-subtle calls of “Cambio! Cambio!” (exchange); the wise ones having checked the current rate first, so they can barter.

“It was a pretty surreal experience,” says one British tourist, who just returned from a trip to Buenos Aires. “An acquaintance recommended a place was given an address, on the upper floors of an office building. I had to explain myself in very limited Spanish, but they knew what I was there for. It was a fully organised operation. It’s not something you expect to do on holiday, but not really a problem, as it turned out.”

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