The pesos are sticking to my boobs as Matt and I race-walk the mile back to our apartment in the 100 degree heat after our first “blue market” transaction. We exchanged $700, which translated to 7700 pesos. 77 bills to stuff in our pockets, Matt’s shoe and my bra. While walking around with a few hundred dollars in the US would not put us in a tizzy, Americans are constantly warned of the perils of carrying large sums of money in South American countries. The cost-benefit analysis promotes the robbing of tourists in countries where an average monthly wage likely is far lower than the few hundred dollars a tourist has in his pocket. Adding to our, okay, really just my, paranoia is the fact that we have left a “cave,” an illegal-but-condoned private money changer, and anyone hanging around clearly knows that we each have a wad of cash somewhere on our person.
So what led me, generally a stickler for the rules, to illegal trading? Economics, pure and simple. On the day we arrived in Argentina, the official exchange rate was 6.7 pesos per dollar. At our local cave, to which we were directed by our landlady, we got 11 pesos per dollar, which allowed our dollars to stretch an additional 64 percent. All guide books, websites, Argentines and just about anyone who had ever been to Argentina told us to exchange our money on the so-called blue market, and when we arrived to Buenos Aires, the blue market rate was published in the newspaper and stated on the television newscasters’ money reports alongside the official rate. So we were initially confused – was the blue market the same as the black market? After all, the second time we walked out of our local cave, there were about 10 police officers in front of the place and not one of them gave us a second look. And our cave had no front business – the door said Consultancy and it was a small lobby with two teller windows. We would hand over our dollars, they would get passed off to someone in a back room and a wad of pesos would come our way. The only added consulting service was when the cashier taught us how to spot counterfeit pesos, which just added to my paranoia about getting ripped off as a tourist.
And then there were the caves on Florida street, the bustling shopping district that had about 10 people on every corner shouting “exchange,” “dollars,” “buy dollars” and the like. We were intimidated by Florida street as we weren’t sure how to avoid getting ripped off or counterfeit bills (honestly, when you are getting that many bills are you going to sit in some back room and look at each one?) so we stuck with our local “consultancy” and grew more relaxed about the walk back to the apartment with our cash.
The blue market exists because Argentines distrust the stability of the peso and prefer the relative stability of good ol’ greenbacks. Stashing dollars under the mattress is no joke. Although most Argentines use a house safe, we literally stuffed our dollars and pesos under our mattress. In 2011, in an attempt to curb this behavior, the government essentially forbade Argentines to own dollars except for travel abroad. Even then, the individual had to apply to obtain US dollars for a trip and such requests were not always granted, or were granted in a stingy fashion. One Argentine told us that people began booking cheap US flights they never intended to use just to obtain some dollars. Going across the river to Colonia, Uruguay, where dollars can be withdrawn from an ATM is also popular. Foreigners can not withdraw dollars from an Argentine bank or ATM, and charging purchases makes no sense as you will get the official exchange rate. So we arrived in Argentina with our entire vacation budget in cash and hit the blue market.
About a week after we arrive the peso plummeted, falling 17% in two days, raising the official exchange rate to 8. The government first decried the blue market, admonished newspapers and television stations for publishing the blue rates, and cracked down on the caves with a series of raids. The government then announced that the restrictions on owning dollars would be loosened and a plan would be announced in a few days. Unsure whether the changes would render the blue market obsolete, we quickly exchanged a few hundred dollars and got an abysmal 9.9 pesos to dollar rate. The following week the government announced that the loosened restrictions would allow Argentines to buy a certain amount of dollars per year based on income, but those dollars must saved in a bank account for a year or be subject to a hefty penalty for early withdrawal. Our “consultancy” had a padlock on the door but Matt and I needed to exchange a few more dollars. We headed to Florida Street and the mood was subdued – no one hawking their rates or shouting “cambio,” but quiet people hanging around with calculators in hand. We asked our Peruvian friend to come with us and she was amazing in action: approaching various exchangers before negotiating an fantastic 12.2 rate for us. We followed the woman down a side street and into an actual travel agency where we were buzzed in and the door locked behind us. Matt and I would have freaked out on our own in that situation, but we felt fine with our friend, particularly after she discerned that the owner was Peruvian and chatted him up. He was tickled that we lived in Peru, so we dispensed with checking the cash for counterfeits and hoped we weren’t ripped off (we weren’t).
We are headed back to Argentina in May for a wine trip to Mendoza, so I checked to see whether the blue market remains alive and well. It is. As of today, the official rate is 7.88 and the blue rate is 11.25. Apparently, Argentines still want their dollars.