Argentina’s Blue Market

Argentina's blue market

NOTE: As of December 2015, the Argentinian government has lifted its control on the foreign-exchange market. From this point on, normal bank exchange rates should apply. This means visitors can use their credit and ATM cards and exchange foreign currency in banks without loosing any money.

During our travels in Argentina, we will be referencing the country’s “blue market”. For visitors to Argentina, understanding the country’s currency issues, its blue market, and the associated problems for travelers is absolutely ESSENTIAL. Even if you aren’t immediately headed to Argentina, the topic is pretty surprising and definitely worth a read.

The Basics

In 2007, the government of Argentina instituted currency controls which severely limited the exchange of Argentinian pesos into dollars. This created a black market for the illegal trade of pesos for dollars. The market is so open and so commonly used that people have started referring to it as a “blue market”. There are two exchange rates for dollars in Argentina the official rate and the much higher blue market rate.

What does this mean for travelers?

Because all electronic banking is based on the official exchange rate, credit card purchases and ATM withdrawals will be processed at that official exchange rate costing travelers much more money. Similarly, any cash exchanged in a bank will be exchanged at the official rate. As of February 2015, the official exchange rate for one dollar is 8.5 Argentine pesos, whereas on the blue market one dollar is 13.5 pesos. This means everything you buy at the official rate will cost you 58 percent more. Ouch!!!

Does using the blue market make Argentina cheap?

No.

This is where many younger travelers make a huge mistake. They have heard stories about black markets in the past and think this applies to Argentina. Others have heard stories about the crash of 2001 and think they are experiencing the same thing. One blogger I read even boasted about “living it up in Argentina” due to the blue market exchange rates. For a variety of reasons, Argentina’s blue market functions very differently from the third-world black markets of the past. Moreover, the country is currently experiencing one of the highest inflation rates in the world.

In reality, using the blue market makes prices normal rather than extortionate. Using official exchange rates will make you think you are traveling in Norway. The exception to that rule is if you happen to be traveling in Argentina when there is a massive fluctuation in the blue market rate. That might make things cheaper (or possibly much more expensive) for a few weeks.

Side effects of the blue market

  • You basically can’t use a credit card or ATM unless you want to pay 58 percent more.
  • Many hotels and businesses will not even accept credit cards in Argentina because they don’t want to receive their payment at the lower official rate.
  • Using hotel booking sites to book hotels is harder or impossible. After booking one hotel via a well known booking site, the hotel sent us an email demanding payment in dollars and a separate deposit via PayPal. They had also manipulated our initial booking to make our three-night stay look like a one-night stay.
  • Some hotels and businesses refuse to accept anything but dollars from foreigners. In their desperation to get dollars, many Argentinians are starting to view tourists as a way to get foreign currency.
  • Getting imported products is harder and more expensive in Argentina. Many stores cannot import products because they don’t have foreign currency. For example, we wanted to buy an additional camera lens in Buenos Aires, but the camera stores had very limited stock and prices were often more than twice that of other countries.
  • Similarly, there are often shortages of basic products because they are only available from countries abroad. There was a well publicized tampon shortage while we were here. And remember, certain medications might not be available in Argentina due to difficulties importing them.

Do these problems effect luxury travelers?

Yes. All travelers will experience the effects of Argentina’s currency issues. However, many luxury travelers we talked to seemed to be unaware of the problem and disregarded the complication of the blue market. They simply used their credit cards and paid 58 percent more for everything. But be aware that if you pay $500 US a night for a hotel, that room is most likely only worth $200. The same goes for restaurants and transportation. The big exception is for hotels and businesses which are able to completely process credit card payments abroad and do not require that that payment go through Argentina. This is most common with large international chains.

Where can I exchange money at blue market rates?

It is easiest to exchange money in Buenos Aires. Most visitors look for money changers along Florida Street and Lavalle Street. Be aware that some unscrupulous money changers have been known to give travelers counterfeit pesos, so learn to identify real Argentinian bills. Check out this Wikipedia article for pictures of the bills.

Be aware that blue market rates decline as you move further away from Buenos Aires. In some parts of the country, it can be difficult or impossible to exchange at decent rates. Sometimes, there doesn’t even appear to be a blue market at all.

Can I exchange other currencies?

Blue market money changers will change other currencies including euros, reals, Chilean pesos, etc. But rates are best for American dollars.

Where can I get dollars in Argentina?

Basically, you can’t, so bring everything you’ll need with you in cash. Many travelers are forced to make a quick trip to neighboring countries to get ahold of some dollars. Many people who arrive in Buenos Aires without dollars choose to make a quick trip to Uruguay where dollars can be directly withdrawn from ATMs.

Xoom.com allows people with American bank accounts to withdraw money at rates above the official rate from within Argentina. The service does require a few days to set up. There are similar services for non-Americans.

More Info

There are tons of great articles and resources online discussing the currency situation in Argentina and the blue market. Wikipedia also has an extensive article on the history of the economy of Argentina, which is quite interesting.

6 responses to “Argentina’s Blue Market”

  1. avatar Melanie says:

    Big thanks for writing this. I’m headed to Argentina next and I didn’t realize what a big difference the blue market makes.

  2. avatar Oliver says:

    Do you know how big the difference is between rates in Buenos Aires and other towns in Argentina such as Ushuaia or El Calafate? I plan to enter via Punta Arenas in Chile.

    • avatar Tony says:

      @Oliver,

      Rates are all over the place. In Ushuaia, people were able to get 13 per dollar if they were lucky enough to discover one of the two places that exchanged at blue market rates. Some towns like El Chalten and El Calafate go out of their way to make exchanging difficult/impossible. Apparently, some locals feel the currency manipulations are helping them because confused/desperate tourists sometimes pay up in dollars at official rates making cheap dollars available to business owners. In such cities, digging around revealed that some people would exchange at up to 11.6. The bigger the city, the easier it is to find someone. And the rates mentioned here took some work to find.

  3. avatar Shane says:

    It is a real pain in the ass to have to carry so much cash while you are traveling around. I miss my cash card.

  4. avatar Monica says:

    Thanks so much for this fabulously informative article! We will use this advice as we plan our trip to Argentina this fall.

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