Money

If you are traveling abroad, getting money in the local currency is always something to take care of. Even though, due to world wide working credit cards, online payments and ATMs also in very remote areas, it is way easier than it used to be. But still we were struggling in Argentina at the beginning.

We knew from other travelers in Argentina that you usually get a better price if you pay in US$ directly, or changing US$ to Argentinean Pesos (ARS) in an exchange office instead of withdrawing from an ATM.

Having this in mind we took advantage of the fact that the official currency in Ecuador is the US$ and at the airport we withdrew a lot of dollars. We ended up with approximately 1500 US$ in 50 and 20 Dollar bills because that is what you get from an ATM in Ecuador. It felt strange carrying so many bills around.

Even though the idea was good in theory, reality was different. In the bureaus of exchange they check each and every single bill very, very carefully and when they find any spot or stain or any tiny damage, they reject the bill. Basically they only accepted bills that were completely new. Unluckily, our money was looking more like this:

So we had to pay in US$ directly or to exchange money on the street. To say the least, exchange rates were varying A LOT! Even depending on the size of the bill. In Bariloche for example you received more or less the same amount of Pesos for six 20 US$ bills like for one 100 US$ bill. In other words 6x20=100. Smaller bills were just not appreciated that much. Everything in between 150 ARS for one US Dollar up to 350 ARS was possible (in December 2022). Second thing is that the biggest Argentine bill is 1000 ARS (about 3 US$).

The confusing thing was that the exchange rate on the street did not even closely match the official one that our bank used.

We talked about it with various Argentinean to get a better understanding. We learned that Argentina is suffering from strong inflation for years. In 2022 alone, inflation rate was close to 100%. To „improve“ the situation the government invented a system of independent exchange rates between US$ and ARS depending on the usage. So there is a Soy Dollar rate, a Tourist Dollar rate, a „Dollar blue“ (the one on the street) and obviously an official Dollar rate.

It is a complicated and market distorting system, that I still lack to understand completely.

I got the impression that most of the Argentinean people are either angry about their government or so frustrated for such a long period of time, that they gave up being angry.

Generally there is a lot of mistrust in the government what I find very justified.

For example most of the farmers with land fruitful enough to do agriculture grew crops like wheat. Within the last decades the government motivated them with laws and substitutions to change and cultivate soybean. Most of this is being exported and internationally traded in US$. To boost selling, the government created an independent exchange rate for soy. Which seems nice in the first place, but when the farmers need to buy spare parts for their trucks that are to be payed in US$ as well, but for another exchange rate.

To import goods (like spare parts for motorcycles) is a disaster. To keep as many US$ in the country as long as possible, it often takes weeks if not months until the money that is paid from the ordering person is being received by the vendor. For example, I was told that tons of cotton, that were ready to be picked from the fields, were just staying there starting to mold due to missing special tires required for the picking machines that had a delivery time over several months. When they will arrive, the hole harvest will already be gone bad.

In February 2023 one US$ was worth:

• 200 ARS officially

• Between 150 and 350 ARS when you change on the street

• 360 ARS if you pay by VISA

• 390 ARS if you use Western Union to withdraw cash

• And many other amounts depending on what you change it for
  

Just imagine: January 2018 for 1000 Pesos you got 52,6 US$. Today the same bill is worth 5,22 US$ officially, and in reality 2,50. Hundred years ago Argentina was within the top ten riches countries in the world. There is a lot of fruitful ground, natural oil, gas and there are rare earths and minerals…

But the country is suffering. Even though the natural resources are being extracted and huge profits are being made, the benefits remain in the pockets of huge companies outside the country thanks to corruption on so many levels.

Additionally, there is the legacy of centrally planned economy (as it is in socialist countries like the former German Democratic Republic, East Germany) which causes a brain drain and many highly qualified young people leave the country due to the lack of adequately paid opportunities and financial stability. Somewhat it reminds me of Cuba, where as a taxi driver for tourists you earn more than as a dental surgeon.

Overall, a very difficult and sad situation for the Argentine people and their beautiful country.

For us, we have to experience the inflation only for a limited amount of time while we travel and with Western Union we finally encountered a way to withdraw money under good conditions.

Now while we are in Argentina, I send Astrid every x days 500 € and she then picks up a package between 200 and 350 bills, depending on how many 500 ARS or 1000ARS bills they hand out.

It is amazing to see how happy Argentinean generally are and how little they complain given the situation they are in. I cannot imagine how Germans would react.