Money, Money, Money

Money is a somewhat confusing topic in Argentina but I will explain it the best way possible. 

In Argentina inflation is a real thing and a serious problem. The currency is the "Argentine Peso" and what a peso is worth varies within a matter of months and over the course of a year can dramatically change. Because of this problem, Argentines began purchasing dollars as a form of more stable currency to save with. 

When the economy in Argentina crashed awhile back, they actually converted completely to dollars. When they returned to using pesos, the purchase of dollars became restricted as a way to stabilize the economy. The only problem is, no one trusted the peso and knew how unreliable it was. Out of this distrust of the currency, the dollar became a valuable resource worth purchasing and investing in. Since an Argentine can not just go and purchase as many dollars as they want because of the restrictions, a black market was born. There is an official exchange rate and then an unofficial rate or the "blue dollar" rate. This blue rate changes slightly most days and is well know around the country. It is broadcasted on the radio, published in newspapers, and talked about regularly. At lanacion.com you can see what the official rate and blue dollar rates are at any time. They even have a calculator to see what the dollar is worth depending on how you exchange money. 

It makes sense that Argentines save in dollars. If they were to save 1 million pesos today, it is possible that it would be worth half of that in 2 to 3 years, devaluing their savings significantly. There are only estimates as to how many dollars are being saved in Argentina but guessed that there is around 50 billion USD being hoarded within the country. NPR did a piece on the exchanging of dollars in Argentina if you are interested in reading more. 

Currently, I can get about 13 pesos/1 dollar if I exchange at the blue rate, but only about 8.8 pesos/1 dollar at the official rate (like withdrawing from an ATM or taking dollars to a bank). When it comes to paying tuition, travels, or day to day expenses that can make a huge difference. 

$100 dollar bills compared to 100 peso bills when exchanged at the blue rate. The largest bill in Argentina is 100 pesos, which is currently worth about 10USD (depending on which rate you use). 

There is a 3rd way that some exchange students get money if they did not bring dollars to Argentina and it is through XOOM. Xoom is a money transferring company in which dollars can be transferred to this company and then you later go to their location and pick up pesos as a rate that falls somewhere between the blue and official rates. There is a small fee attached to the service. I have not used it before and I have no idea how illegal or legal it is but from the testimonies of the other students who are studying in Cordoba with me, they have said that is has worked out well for them. 

So that is money in Argentina. Somewhat complicated but if you stuck with the entire post, at least you got in your economics lesson for the day.