Dolar blue: double your money with Argentina’s black market currency exchange

Officially, 1 US dollar (USD) today will buy you around 5.8 Argentinian pesos (ARS). So how did I get an exchange rate of 1 US dollars for 9.2 pesos? Put simply, if there’s one thing South America likes, it’s a good black market.

My Kingdom for a US dollar

Bare with me here while I gaily skip over 20 years of Argentina’s economic history in 3 sentences.

During the economic downturn of 1999-2001 and faced with a severely inflationary peso, Argentinians withdrew their money from the major banks in droves, preferring to store it in their mattresses in US dollars instead of in the ‘unreliable’ local banks. Alarmed at the rate at which money was leaving the system and keen to keep the circulation of US dollars up to be able to service its overseas debt and infrastructure investment, the Argentine Government clamped down on the ability for locals to withdraw US dollars from the banks, more-or-less limiting it to those leaving the country for a holiday. Even then, and I’m quoting my current landlord here, “It takes months to get my approval through to purchase US dollars, and even if I’m going to the US for 2 weeks, the government is only likely to approve me for, say, US$100. That’s it.”. While possibly an exaggeration, there’s only so many pairs of Levi jeans (2 actually) that you can buy with US$100, so it was only a matter of time before a solution presented itself.

You can’t keep a good Argentinian down

Nothing says ‘entrepreneurial spirit’ like setting up your own black market currency exchange system, and in order to circumvent the government’s paltry US dollar distributions this is exactly what the Argentinians did.

Dubbed ‘dolar blue‘, it consists of an informal network of shops, houses, street hawkers and, well, basically anyone fancying themselves as a bit of a self-starter, pitching cheap pesos to all and sundry. The individuals/businesses offer to buy US dollars (from tourists in particular) for an exchange rate (tipo de cambio) well in advance of the official currency – in my case today, 9.2 pesos for 1 US dollar versus the official exchange rate of 5.8 pesos that I would have received by going to one of the major banks. They then on-sell these US dollars at a higher rate to non-self-starting Argentinians either looking to go on holiday to the US, who prefer to own US dollars as an inflation hedge (Argentina today continues to have an epic double-digit inflation problem), or to Argentinian businesses requiring US dollars to transact offshore.

Show me the money

So how does one go about finding the magical exchange rate of double-ness I hear you cry? Well I can’t tell you exactly where to get it here because I might land someone in jail, but if you’re genuine and interested email me here and I’ll give you specific premises to go to. Alternatively you’ll find hawkers openly spruiking ‘change’ (cambio) on Calle Florida in Buenos Aires, but that is my less-preferred method for exchange given you’re out in the open.

The thing is, the dolar blue is technically illegal, and if the police catch you transacting for pesos with US dollars in an unofficial setting they can lock you (and the proprietor) up. Fortunately, Argentinian police 1) also like holidaying in America, and 2) passionately dislike the federal government, so they tend to turn a blind eye. In a step to the absurd, the local Buenos Aires newspaper actually publishes the current dolar blue exchange rate daily (see here) in its own stand against The Man, so you know you’re pretty safe.

Nothing says ‘black market exchange rate system’ like fake currency

Well it couldn’t all be beer and skittles could it? A word to the wise – counterfeit currency production is alive and well and circulating in a tourist trap near you. And not just in tourist traps – cab drivers, restaurant waiters, basically anyone who thinks they can pull a swifty over you could be peddling counterfeit currency in Argentina. While all note denominations are counterfeited, by far the most prevalent and the only one you’re really going to want to worry about is the $100 peso note.

So how do you spot a counterfeit $100 peso note? They’re reportedly getting pretty good these days, but generally speaking here are a few things to check for:

1) Julio Argentino Roca (President of Argentina from 1880-1886, and 1898-1904) is the obligatory figurehead found on one side of the note. The motif is to the right of the note, and if you hold the note up to the light you should be able to clearly see a watermark copy of his head on the left side (NB: the counterfeit notes either have no watermark, or a poorly printed one). Fortunately, it appears my $100 note below is real:

100 pesos

2) The ‘100’ at the top-left of Julio’s head is printed in a shiny green ink, which when tilted towards or away from the light should turn blue – the counterfeits don’t tend to do this;

3) To the left of Julio’s head and running vertically down the note is a series of 6 small metallic silver lines (see below). When you hold the note up to the light (see above), these should merge to form one long line – again the counterfeits don’t tend to do this:

100 pesos 2

Is it worth the trouble and risk?

In short – yes, I believe so. Getting nearly double your money for a small amount of research and legwork goes a long way to delivering a value holiday. For me personally the benefit really came home to roost when I realised that by getting the unofficial exchange rate, I reduced the cost of the 2009 Malbec that I worked through as I wrote this from a ghastly US$4.22 to a much more palatable US$2.67. As they say in Argentina – salud!

Hasta luego mi amigos…

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About Nick Berry

Born, raised and incubated across Melbourne, Sydney, Hong Kong and London, after 8 years in stock broking I'm now exploring new horizons. Come join me and I'll do my best to keep you entertained!

5 responses to “Dolar blue: double your money with Argentina’s black market currency exchange”

  1. Jorge Vieira says :

    Hello Nick,
    I’m traveling from Portugal to Argentina in January and I’d like to know where to get the nice exchange rate you got, I’m bringing Euros.
    Thank you

  2. Valerie Conners says :

    Hi Nick,
    I’m heading to Argentina for 2 months, and definitely want to use the Black Market for exchanges, but I’m kind of spooked by it all. Is it safe? My landlord with a seemingly reputable rental agency offered to exchange money for me at a rate that would be about 1 peso less than the Black Market rate. Is it worth doing with him for safety reasons? Also, is there a way to contact you for info on trusted places to go to exchange money? Thanks!
    Valerie

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