Follow the Money: Mini-Devaluation Means Cheaper Chile
It’s mostly stayed in that range until very recently, but that’s caused problems because Chilean exports, such as wine and fruit, have become more expensive. Likewise, foreign travel in Chile – a sort of export in that in brings in dollars or other non-Chilean currency – became more expensive than neighboring Argentina in particular.
This is always a concern for me because, getting paid in dollars but with many expenses in pesos, it affects my earnings. When I wrote the current edition of Moon Handbooks Chile, whose in-the-field update I will begin by November, the rate was around 600 per dollar and travel there was economical. At the beginning of this month, when I had last looked, it was 459, and I had been dreading an expensive research trip.
That was before Chile’s central bank (pictured above, courtesy of Wikipedia) started selling off pesos so that, on Friday, the rate was 518 to the dollar – a devaluation of nearly 13 percent in just three weeks. According to Business Week, bank president José de Gregorio undertook the policy because rising Chilean interests rates made exports uncompetitive. Though constantly monitored, the program is expected to continue until December.
For foreign visitors, meanwhile, it looks as if this southern summer could be cheaper in Chile than it was last year.
Is Stanley the New Havana?
Moon Handbooks Patagonia, which covers the Argentine and Chilean sides of southernmost South America, plus Buenos Aires and Santiago as gateway cities, plus the Falkland Islands as “Insular Patagonia.” Since 1999, when the Argentine government agreed to let LAN Airlines flights from Punta Arenas, Chile, to fly over its airspace, the British-governed Islands have been increasingly integrated into the region.
The current Argentine administration, though, has put this integration at risk by restricting foreign vessels sailing to and from the Islands, which it claims as the “Malvinas,” without its permission. It has also prohibited additional LAN services, including charter flights, from traveling between Chile and the Islands.
In a speech to the United Nations last Wednesday, President Cristina Fernández went a step further by threatening to suspend the existing link because of disagreements with Britain. This is an election year in Argentina, Fernández is a leading candidate for re-election, and no Argentine politician has anything to lose by waving the flag on the Falklands/Malvinas issue.
Whether this will affect the upcoming travel season, I don’t know – it could be just empty symbolism, which is a symptom of Argentine politics. But has it occurred to anyone else that the blockade of the islands, which could get worse, is precisely what the United States has done to Cuba over the last 52 years?
Moon Handbooks Buenos Aires in Millbrae (San Mateo County)
Thursday September 29 will mark the last of four digital slide presentations on the fourth edition of Moon Handbooks Buenos Aires, at various branches of the San Mateo Public Library. This event starts at 1 p.m. at the Millbrae Library (1 Library Avenue, Millbrae, CA 94030, tel. 650/697-7607). There will be ample time for questions and answers, and books (also including Moon Argentina and Moon Chile) will be on sale (at a discount).
Next month, I will be on the road promoting the new third edition of Moon Handbooks Patagonia. Most of the events will be in the San Francisco Bay Area, but I will also be appearing in Seattle and Bellingham, Washington; Vancouver BC; Santa Fe, New Mexico; and Pasadena, California. Watch this space for details.