How To Get The Best Exchange Rate When Traveling To Argentina

AP Photo/Natacha Pisarenko

Argentina is definitely not as cheap as it once was due to continued inflation each year. While the value of the peso has gone down in relation to the dollar over the years (when I first arrived in Buenos Aires 3 years ago 1 US dollar = around 3.9 pesos at the official rate, today 1 US dollar = 4.6 pesos.), the rapid rate of price inflation has made the effects of a stronger dollar vs. the peso minimal. For example, let’s say a beer cost 10 pesos in 2009 and today it costs 20 pesos (I am not using exact data here, just hypothetical.). That beer that was 10 pesos in 2009 cost 2.56 dollars. The 20 peso beer of today costs 4.33 dollars. So while the peso has gotten weaker in relation to the dollar, someone’s purchasing power who has converted their dollars to pesos is still weaker.

Something that recently amazed me was that for many tourists coming to Buenos Aires, they might be getting even a worse rate than the official rate of 4.6 if they exchange their money at the airport, which a lot of people do. While at the airport recently looking at the rates, the exchange houses were giving a horrible rate of 3.5 pesos to a 1 US dollar!!

There are a few tips and tricks that can make the purchasing power for those with dollars to be much stronger and closer to with what they would of payed 3 years ago in dollar terms. The key to increasing one’s purchasing power is to buy Pesos as close as possible to the free market rate of the peso, called the “Blue” rate. This is the rate that represents the real value of the Argentine peso in relation to the dollar and that is not artificially kept overvalued by government controls. The “blue rate” is currently at 6.41 pesos per dollar. Lets take a look at some examples.

1. Xoom.com

I was first introduced to xoom.com by DaVe who runs the great Buenos Aires expat blog discoverbuenosaires.com. 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.

The real value in Xoom besides its convenience is it provides an exchange rate that is close to the “blue” rate. For example, the rate given on Xoom as of this writing is 6.1184. So using the example from above, a 20 peso beer today would cost $3.27 dollars at the rate of 6.1184. While it still is not as cheap as what the beer cost in 2009 at $2.56 dollars, it is still much cheaper than if you would of bought pesos at the official rate (1 beer= $4.33 dollars). So instead of paying 69.1% higher for a beer, you are only paying 27.7% higher in dollar terms.

The savings are more apparent if you buy a large amount of pesos. Lets say you buy 1000 dollars worth of pesos. Instead of getting 4,600 pesos at the official exchange rate, you would get 6,184 pesos. This is even more of a big saving if you compare it with if you would exchange your dollars for pesos in the airport at the crappy rate of 3.5 pesos per dollar. Instead of 3,500 pesos, you would almost have double at 6,164 pesos.

There are fees of 30 dollars for every Xoom transaction over 1000 dollars, $15.75 for over 500 dollars, $3.75 for over 100 and $2.99 for over 25 dollars, which do lower your effective rate a bit, but if you do large transactions it is minimal. DaVe from discoverbuenosaires.com does a detailed break down of your savings included transaction fees here.

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 by far the best way to go.

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.

2. Sell Dollars to an Argentine Friend

As many have read about recently in the news, dollars are in high demand in Argentina. It is impossible to save in Argentine Pesos due to inflation, so traditionally Argentines have looked to both dollars and real estate as a store of value. With recent laws being passed basically banning the purchase of dollars through official channels, dollars are in as high demand as ever. This has resulted in the free market price of the dollar (blue rate) to shoot up recently, creating a large gap between the official rate and the “blue” rate. Ordinary Argentines looking to buy dollars are forced to pay the higher free market rate in the black market.

Fortunately there is a way for both travelers to Argentina and local Argentines to come together and benefit from a mutual exchange. Instead of buying pesos at a bank or at an exchange house, you can sell dollars to an Argentine friend who is looking for dollars. In terms of the rate, you can meet in the middle. So with the official rate at 4.6 and the Blue Rate at 6.41, you could do the exchange at a rate of 5.5.

This was both a safe and convenient way for both people to get what they wanted without having to go to a sketchy underground exchange house and risk being ripped off. Of course, if you are coming to Argentina and you don’t know anyone this is a hard thing to do. But if you have friends in Argentina, this is a great option.

3. Find a Casa De Cambio (Exchange House) That gives a good rate

This is not the preferred way to do it, but there are probably exchange houses that will give you a better rate than the official rate. If you go to a official exchange house, you will probably get a better rate than if you change your money at the airport. The rate will be around the official rate of 4.6. But if you look around the streets hard enough, you might be able to find a house that will buy dollars for a better rate. Just be careful with these exchange houses as they might try to rip you off, especially if you don’t speak good Spanish and you are a tourist.