It’s a topic that never goes away or, at least as long as Argentines seek economic security and their government does everything possible to prevent it, their impulsive urge for the US dollar is unlikely to go away. Recently I wrote about the so-called “Colonia Dollar” and the distortions and inconveniences it had caused in the Uruguayan city across the River Plate but, in the interim, Argentina's government devised yet another one: from this moment on, Argentines visiting neighboring countries will be able to use only a single credit card to withdraw a cash advance of no more than US$100, once every three months. For other countries, they will be able to withdraw up to US$800 per month. They still cannot use their debit cards outside Argentina.
For residents of Colonia and non-Argentine tourists crossing the river, this should simply the process of obtaining cash from the city’s ATMs; the endless queues of Argentines will presumably disappear. At the same time, according to the local press, Argentines have found a new means of purchasing dollars: They can travel to Montevideo, where the exchange house rate (slightly more than eight pesos to the dollar, as suggested in this window on the city's central Avenida 18 de Julio) is less attractive than the cash advance rate (about 6.3 to the dollar), but it’s still cheaper than the so-called “blue” dollar in Buenos Aires (slightly less than nine pesos). The ferry from Buenos Aires to the Uruguayan capital is more expensive and takes longer (three hours in each direction), but Argentines can carry the equivalent of US$10,000 (roughly 52,000 Argentine pesos) without having to make a currency declaration.
For an Argentine saver, that’s a profit of roughly 10,000 pesos less, of course, the cost of the trip, though it’s also a risk as the price of “blue” dollar has dropped in the last week or ten days since the Argentine government proposed a tax amnesty for repatriated overseas funds that opposition forces have denounced as an incentive to money-laundering. That measure is presently working its way through the Argentine Congress, and seems likely to be approved. The consensus, though, appears to be that the government will make every effort to hold down the dollar until after mid-term congressional elections in October. Whether they’ll continue to be able to do so is another issue entirely.
Meanwhile, Uruguayans are taking advantage of their relatively strong currency to purchase Argentine pesos at the “blue” market rate for holidays in Buenos Aires, even though the dollar has been strengthening against the Uruguayan peso (which now goes for 20 per dollar, up around five percent over the past couple weeks). For travelers with US dollars, the Chilean peso has also been weakening and now stands at roughly 490 per dollar). Neither currency, though, remotely approaches the volatility of Argentina’s, given what Buenos Aires Herald columnist Andrew Graham-Yooll calls a “currency exchange process that more than a policy looks like a throwback to the Soviet Union.”
Moon Handbooks Chile, in Saratoga
In just a few weeks – Monday, June 17, at 7 p.m., to be precise – I will offer a digital slide presentation on travel in Chile at Santa Clara Country’s Saratoga Library (13650 Saratoga Avenue, Saratoga CA 95070, tel. 408-867-6126, ext. 3817). Coverage will also include the Chilean Pacific Islands of Rapa Nui (Easter Island) and Juan Fernández (Robinson Crusoe), as well as southernmost Argentina (Tierra del Fuego and the vicinity of El Calafate) that appear in the book. I will also be available to answer questions about Argentina and Buenos Aires. The presentation is free of charge, but books will be available for purchase.