Out of the Cave and into the Sunlight! An End to Argentina's Dollar Blue(s)

It’s over! On Wednesday evening, Argentina’s new finance minister Alfonso Prat-Gay announced the end of the the cepo cambiario (“currency clamp”) that, since 2011, had made it difficult for Argentines to purchase foreign currency for international travel. It also confused foreign visitors, and inadvertently created the so-called “blue dollar,” traded surreptitiously behind closed doors since 2011.

The measure is long overdue, and will benefit visitors even if the weaker peso does contribute to short-term inflation (this is still unclear, since the peso has actually gained slightly against the former blue dollar since the change). Two weeks ago, on December 4th, the last place I changed US dollars for Argentine pesos was the cueva (cave) pictured above in the lakes district resort of San Carlos de Bariloche, where I had to make an appointment by phone and then be admitted through the reinforced door, where an employee in a barred booth counted out my pesos.

The end of the clamp means that tourists will no longer have to seek out potentially shady money-changers in Buenos Aires or elsewhere, since they will now be able to withdraw money from ATMs without paying, in effect, a 30 percent penalty on every purchase (though they will have to pay charge on each ATM transaction; minimize this by withdrawing larger amounts). This should be a relief to everybody except the previous government of President Cristina Fernández de Kirchner, whose financial house of cards has collapsed.

There remains one other major task that should make everybody's daily transactions easier. The government of newly elected President Mauricio Macri should create larger banknotes, ideally of 200 and 500 pesos, that will not test the carrying capacity of ordinary wallets and even armored cars - the reams of 100-peso notes (worth about US$7 each) are still a logistical nightmare.