This explanation is for those traveling to Argentina who are not accustomed to the coexistence of different types of exchange rates for the same currency. Here we explain the difference between the “official dollar” and the “parallel dollar”, also known as “blue”. There are dollars of other colors, but we will stick to those that affect tourists traveling to Argentina.
First, a brief explanation:
There is a shortage of dollars in Argentina and the government does not want them leaving the country under any circumstance. For this reason, a few months ago it was prohibited to purchase dollars (currency exchange control) and even prior to that, the government dramatically restricted the import of dollars.
At this time, Argentinians are not able to go to a bank or currency exchange place to purchase dollars (or Euros, Yen, etc.). Only persons authorized by the government, and only under specific circumstances, are allowed to purchase currency. This has led to the development of a black market that sells dollars at a much higher price than what has been established by the government – this is also known as the “official dollar”. The parallel or blue dollar is governed by supply and demand and once the flow has been closed off, making dollars difficult to come by, their price increases and continues to do so.
Why has the government taken this step? I am not an economist but I believe that it is because Argentina needs to balance the register in order to keep the present political model. The idea is to keep dollars that enter to remain in the country, or that a minimum number of them leave. If the country cannot find the surplus necessary to finance itself (which is a lot), the government would need to take out loans from exterior markets at an interest rate much higher than other countries.
Argentinians are accustomed to thinking in dollars given the weakness of the Argentinian peso, which is why they run to this currency when able, when worried and when they want to save. This all lends to the daily evolution of the official dollar and parallel dollar’s values.
For all of these reasons, it is necessary to understand that the most convenient thing for tourists traveling to Argentina at this time is to take dollars in cash and exchange them into pesos or use them. Beware of the parallel and blue dollar values. It is also important to understand that if you pay using a credit card, you are paying at the official exchange rate. This means that you would end up paying more than if you used dollars in cash or with pesos purchased in the informal market.
Here you can find up to the minute values: http://dolarblue.net/
Update: In this new post, Tips for traveling to Argentina: dollar, euro, official, parallel, blue Part II I discuss questions raised in this post and attempt to clarify the information provided.
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