AP Photo/Natacha Pisarenko

Article updated on February 11, 2014.

After the Argentine peso was de-pegged from the dollar following the financial crisis of 2001/2002, people visiting Buenos Aires with dollars found that the country was incredibly inexpensive. As the years rolled on, Argentina experienced annual inflation around 25% to 30%, resulting in prices even in dollar terms to rise. The official exchange rate didn’t devalue in relation to the dollar fast enough for prices in dollar terms to absorb the rising consumer prices in pesos. So for many tourists and expats exchanging their dollars for pesos every month, things actually started to seem expensive in Argentina.

After the end of 2011 when the government imposed restrictions on the amount of dollars Argentine citizens could buy for savings or travel (basically banning the purchase of foreign currency), the black market for dollars picked up steam, creating a parallel exchange rate which at some moments was 60-70% more expensive (this alternative exchange rate is called the “blue rate”). This was not good news for Argentines, but for tourists or expats with dollars, this meant they could buy more pesos for the same amount of dollars, increasing their purchasing power dramatically and making Argentina seem cheap again.

How cheap or how expensive Argentina is depends on what rate you change your dollars at. Before Argentina officially devalued its peso in mid January 2014, if you were to exchange dollars on January 1st at the official rate of 6.5 pesos/dollar, prices would have been pretty expensive for you even compared to other countries. But if you would have exchanged dollars at the blue rate of 10.2 pesos/dollar, you would have received 57% more pesos. A cocktail that cost 50 pesos would have cost you around $4.90 dollars instead of around $7.60 dollars. Argentina then devalued its currency to 8 pesos/dollar at the official rate, sending the blue rate to over 13 pesos/dollar. Within just a month those changing their dollars at the blue rate saw around a 30% increase in their purchasing power (and those whose only option is to change at the official rate benefited as well). Granted, many places raised their prices in pesos as a result of the devaluation, especially those who sell imported goods like electronics, but this recent increase in purchasing power has benefited those with greenbacks.

The point of all this is that for those with dollars, Argentina varies monthly, weekly or even daily in terms of how cheap it seems. Sometimes the increases in the official or blue rate don’t make up for the inflation in pesos prices. Other times the blue rate sky rockets and the same dinner eaten the week before costs less. As of this writing on February 11, 2014, the official rate has cooled down from its high of over 8 pesos/dollar a couple weeks ago to 7.82 pesos/dollar. The blue rate is down from its high of over 13 to 11.7 pesos/dollar.

Regardless of these fluctuations, it very clear that we want to be exchanging our dollars at the blue rate or as close to it as we can. The following are some general guidelines to follow to get the best rate.

1. DO NOT Change your dollars at the airport!!
Do not under any circumstances change your dollars at the airport. The exchange houses here give rates that are less that the official rate! If you absolutely need pesos when you arrive to the airport, an ATM will give you the official exchange rate, minus whatever fees.

2. Bring physical dollars or euros to exchange.
Unlike travel to other countries, unless you want things to be a lot more expensive, don’t just rely on taking out money from an ATM to get the local currency. You will need to bring physical dollars or euros to exchange and it is not possible to withdraw physical dollars from ATMs in Argentina.

3. Underground exchange houses offer the best rate, but be careful.
In order to get the blue rate, you need to go to an underground “cueva” exchange house to change your dollars to pesos. These places operate in a legal grey area. Although technically illegal, they are allowed to operate. In the downtown of Buenos Aires along the walking streets of Lavalle and Florida, you will find literally hundreds of people shouting “cambio, cambio” (change, change). It should be no problem to exchange with one of these guys, but if you don’t speak Spanish and look like an easy tourist to take advantage of, they could try to scam you in some way. The point is to stay street smart. If something seems fishy, walk away.

4. Ask your hotel, school, or any friendly local for a trustworthy money changer.
To build on point #3, if you are uncomfortable going up to a random money changer, ask around to find a trustworthy one. Most hotels can probably point you in the right direction or even change the money for you. If you are studying Spanish or in school, ask around at your school.

5. See if a local you know wants to buy dollars.
If you are just arriving to Argentina for vacation you might not know anyone, but depending on your contacts in the country, see if anyone you know wants to buy dollars. Most would be interested in exchanging dollars with you at the blue rate.

6. Ask retail stores you shop at if they accept dollars.
Many retail stores will accept dollars as payment at around the blue rate. If you are looking to buy some clothes, gifts, jewelry, etc., ditch the credit card and ask to pay in cash. This is especially useful if you are just visiting on vacation for a week. If you pay with a credit card, you will be stuck paying with the official rate.

7. You can withdraw physical dollars from ATMs in Uruguay.
If you have been in Buenos Aires or Argentina for a while and want to refill on physical dollars without having to return to your home country, consider a trip to Uruguay. It is an easy ferry ride from Buenos Aires and you can be back the same day.

8. Use Xoom.com to transfer money from your USA bank account to Argentina at close to the blue rate.
Xoom is an online international money transfer service. Xoom partners with select money transfer services in countries around the world and allows you to send money from your bank account in the United States directly into an Argentine bank account or for cash pick up at More Argentina (Xoom’s money transfer service in Argentina) using only the internet.

You won’t get the blue rate, but you will be close and still way better off than exchanging at the official rate. As of February 11, 2014 the blue rate is 11.7 and the XOOM rate is 10.6.

For expats living in Buenos Aires who have bank accounts in Argentina and earn dollars overseas, using Xoom to convert their dollars to pesos is an easy way to do it.

For travelers coming to Buenos Aires who don’t have bank accounts in Argentina, it is still possible to use the Xoom money pick up feature. You can transfer the money online after you set up your xoom account and then pick up your pesos at the More Argentina branch located in Recoleta at Libertad 1057.

Unfortunately Xoom is only available to people with bank accounts in the USA.

9. Although you should bring physical dollars to Argentina, don’t forgot to bring an ATM card just in case.
It is always a good idea to make sure you bring an ATM card with you for emergencies. You may only be getting the official rate, but with the recent devaluation it is not that bad. The best ATM card to have in Buenos Aires is the Charles Schwab high yield investor checking account. It charges no international fees and refunds any ATM service charges. The maximum amount of pesos you can withdrawal in one ATM session is 1000, but it is possible to do multiple withdrawals of 1000 pesos in a single day by taking your card out and starting a new transaction.

10. If you are in Argentina or Buenos Aires taking dance classes, yoga, martial arts, private spanish classes, etc., ask if you can pay in dollars.
It obviously makes more sense to try and hold onto your dollars and spend your pesos. You will most likely be able to change your dollars in the future at a better rate for more pesos. But in certain cases it might make more sense to pay for things in dollars. For example, lets say you take yoga classes. In order to pay for those classes, you will at some point need to change your dollars into pesos. It can become a nuisance to have to go to a sketchy cueva to exchange your dollars every week or month. You could propose to your yoga teacher to accept a certain amount of dollars for each class or for a month’s worth of classes, possibly saving you more money than if you would convert those same dollars to pesos. It all depends on what deal you can work out with your teacher, but it is an idea worth exploring.

Disclaimer: This post is for educational purposes only. This post should not be mistaken for direct advice. Use anything you read at your own risk.