4 ms·

How does the "official" exchange rate work? The gov says the peso is worth way more than it really is, so can't you exploit that to get really cheap dollars?

How does the "official" exchange rate work? The gov says the peso is worth way more than it really is, so can't you exploit that to get really cheap dollars? Do they only allow "one way" official exchanges, from dollars to pesos?

conanbatt 4y ago
You have an infinite amount of restrictions around how much, when and what you need to do to get them. Basically rationing.
lvass 4y ago
There are many draconian measures in effect making practically any attempt at arbitraging illegal.
drexlspivey 4y ago
Yes the official rate is one-way. The other way is locked down via capital controls, hence the black market.
Jtsummers 4y ago
At present (or at the time of my last conversation about the situation with my mother-in-law), you can legally acquire 200 USD/month at the official rate. This is part of what's driving the black market rate higher. The "ideal" would be to go to a bank, get a large sum of dollars, and immediately arbitrage it at a changer in some market to double your money. At $200/month, that won't get you a lot right now.
- kragen 4y ago
  Not everyone is allowed to acquire 200 USD per month; only people with legally declared jobs, which I think is less than half the population now. The government policy is that dollars are only for the rich.
FabHK 4y ago
Pick any two: 1. fixed (or managed) exchange rates 2. independent monetary policy 3. free flow of capital Most countries pick 2, 3, not 1, and thus have floating exchange rates. Countries within the Euro area, Hong Kong pick 1, 3, not 2, and thus have limited influence on monetary policy. China, Argentina pick 1, 2, not 3, and thus impose capital controls.
outworlder 4y ago
There's an official exchange rate. If you are a tourist and you want to buy pesos, you have to buy at the official exchange rate. Of course, there will be other places that will give you rates that are closer to that the actual market value is. They may be disguised as place selling collectable coins or whatever. At some stores, they may give you a much higher rate if you buy their stuff with foreign cash. USD and BRL are generally accepted. Then there are the 'arbolitos'. They will be the guys shouting 'cambio!' at tourist locations. YMMV with them. Some are legitimate, some may insert some counterfeit currency in the mix. Personally, I never felt comfortable following someone to an unknown location when they know I have cash in my person.
- kragen 4y ago
  About 30% of the stores in "arbolito" areas are willing to buy dollars at the black-market rate, and maybe 0.1% of them will report you to the police for asking.
TMWNN 4y ago
Let me supplement the other replies to your question. The unofficial rate that outworlder mentioned is the dólar azul (blue dollar). As FabHK and jtsummers said, Argentina imposes capital controls, so you can't buy too many US dollars at the (artificially strong) official rate. The capital controls mean that an Argentinean that buys something from or while abroad must purchase US dollars at the blue dollar rate. Blue dollar is unofficial but so widespread that websites track it. Russia is an interesting contrast to Argentina. The gap between the official and unofficial exchange rates between ruble and US dollar is much smaller than between the Argentinean peso and US dollar. This is because right now it is almost impossible for a Russian to travel or purchase things from abroad, which depresses the demand for dollars. Argentineans are free to travel and purchase things from abroad, so the demand for US dollars is much stronger.
- kragen 4y ago
  It's not the dólar azul, it's the dólar blue. Also, people who travel abroad are allowed to purchase some more dollars at the official rate. Otherwise your comment is correct.
  - TMWNN 4y ago
    Thank you for the correction. How much more US dollars are travelers allowed to purchase?
    - kragen 4y ago
      Looks like I was wrong: the "dólar turista" is 75% higher than the "dólar oficial" that you get paid if you export something, AR$226/US$ rather than AR$130/US$ (but still much lower than the AR$321 of the black market). I haven't been able to figure out what the limit is or who is allowed to buy it. Maybe you can: https://www.cronista.com/finanzas-mercados/dolar-turista-asi-es-el-nuevo-rulo-que-permite-comprar-y-pagar-mas-barato-los-viajes-y-consumos-en-el-exterior/ https://www.cronista.com/finanzas-mercados/dolar-turista-asi... Confusing the issue is that the same "dólar turista" term is also being used to describe a new exemption from the foreign exchange restrictions that allows banks to purchase dollars from non-Argentine tourists visiting Argentina at the "dólar MEP" rate, which is actually currently higher than the black-market rate, at AR$323. Up to US$5000 per tourist per month.

conanbatt 4y ago

You have an infinite amount of restrictions around how much, when and what you need to do to get them. Basically rationing.

lvass 4y ago

There are many draconian measures in effect making practically any attempt at arbitraging illegal.

drexlspivey 4y ago

Yes the official rate is one-way. The other way is locked down via capital controls, hence the black market.

Jtsummers 4y ago

At present (or at the time of my last conversation about the situation with my mother-in-law), you can legally acquire 200 USD/month at the official rate. This is part of what's driving the black market rate higher. The "ideal" would be to go to a bank, get a large sum of dollars, and immediately arbitrage it at a changer in some market to double your money. At $200/month, that won't get you a lot right now.

kragen 4y ago
Not everyone is allowed to acquire 200 USD per month; only people with legally declared jobs, which I think is less than half the population now. The government policy is that dollars are only for the rich.

FabHK 4y ago

Pick any two: 1. fixed (or managed) exchange rates 2. independent monetary policy 3. free flow of capital Most countries pick 2, 3, not 1, and thus have floating exchange rates. Countries within the Euro area, Hong Kong pick 1, 3, not 2, and thus have limited influence on monetary policy. China, Argentina pick 1, 2, not 3, and thus impose capital controls.

outworlder 4y ago

There's an official exchange rate. If you are a tourist and you want to buy pesos, you have to buy at the official exchange rate. Of course, there will be other places that will give you rates that are closer to that the actual market value is. They may be disguised as place selling collectable coins or whatever. At some stores, they may give you a much higher rate if you buy their stuff with foreign cash. USD and BRL are generally accepted. Then there are the 'arbolitos'. They will be the guys shouting 'cambio!' at tourist locations. YMMV with them. Some are legitimate, some may insert some counterfeit currency in the mix. Personally, I never felt comfortable following someone to an unknown location when they know I have cash in my person.

kragen 4y ago
About 30% of the stores in "arbolito" areas are willing to buy dollars at the black-market rate, and maybe 0.1% of them will report you to the police for asking.

TMWNN 4y ago

Let me supplement the other replies to your question. The unofficial rate that outworlder mentioned is the dólar azul (blue dollar). As FabHK and jtsummers said, Argentina imposes capital controls, so you can't buy too many US dollars at the (artificially strong) official rate. The capital controls mean that an Argentinean that buys something from or while abroad must purchase US dollars at the blue dollar rate. Blue dollar is unofficial but so widespread that websites track it. Russia is an interesting contrast to Argentina. The gap between the official and unofficial exchange rates between ruble and US dollar is much smaller than between the Argentinean peso and US dollar. This is because right now it is almost impossible for a Russian to travel or purchase things from abroad, which depresses the demand for dollars. Argentineans are free to travel and purchase things from abroad, so the demand for US dollars is much stronger.

kragen 4y ago
It's not the dólar azul, it's the dólar blue. Also, people who travel abroad are allowed to purchase some more dollars at the official rate. Otherwise your comment is correct.
- TMWNN 4y ago
  Thank you for the correction. How much more US dollars are travelers allowed to purchase?
  - kragen 4y ago
    Looks like I was wrong: the "dólar turista" is 75% higher than the "dólar oficial" that you get paid if you export something, AR$226/US$ rather than AR$130/US$ (but still much lower than the AR$321 of the black market). I haven't been able to figure out what the limit is or who is allowed to buy it. Maybe you can: https://www.cronista.com/finanzas-mercados/dolar-turista-asi-es-el-nuevo-rulo-que-permite-comprar-y-pagar-mas-barato-los-viajes-y-consumos-en-el-exterior/ https://www.cronista.com/finanzas-mercados/dolar-turista-asi... Confusing the issue is that the same "dólar turista" term is also being used to describe a new exemption from the foreign exchange restrictions that allows banks to purchase dollars from non-Argentine tourists visiting Argentina at the "dólar MEP" rate, which is actually currently higher than the black-market rate, at AR$323. Up to US$5000 per tourist per month.