During our two weeks of travel in Argentina, we have predominantly used credit cards (Chase Sapphire Preferred for dining, Citi Premier for gas and Capital One Venture X for everything else). All the restaurants we visited in Bariloche and Mendoza accepted Visa or Mastercard without any additional fees. Since our accommodations were paid using the points (review) (review), we did not have any major cash expenses.
Cashing out US dollars is best only if you can get a “Blue Dollar” value
In recent years, Argentina went through economic volatility and currency fluctuations, characterized by periods of high inflation and currency devaluation. Due to concerns about inflation, currency devaluation, and economic uncertainty, there is a high demand for US dollars as a store of value and hedge against depreciation. Individuals and businesses seek to acquire US dollars to protect their savings and investments.
The “blue dollar” is a colloquial term used in Argentina to refer to the unofficial or parallel exchange rate of the US dollar that offers a greater value than the official exchange rate. Restrictions on accessing the official exchange rate may lead individuals and businesses to turn to the informal currency market, where the blue dollar rate prevails. The Blue Dollar rate (BlueDollar.net) is determined by supply and demand dynamics in the unofficial market and may fluctuate based on economic conditions and investor sentiment (see the image below).
Based on the image above, the official exchange rate between USD and Argentinian Pasos (ARS) is 1 USD = 850 ARS. However, you can get up to 1000 ARS for 1 USD in the unofficial Blue Dollar Market.
Where to convert US Dollars to Argentinian Pasos at a Blue Dollar exchange price?
If you are planning to exchange US dollars for Argentinian Pasos, I recommend the following:
- DO NOT withdraw USD from an ATM in Argentina (even with a Charles Schwab ATM card).
- Bring as many $50-100 USD bills as possible so you can get the best Blue Dollar exchange rate (lower denominations may yield less exchange value).
- Ask the owner or concierge at your accommodation about the safe Blue Dollar exchange places nearby. Try going there with a $50-100 bill and see if you are getting the exchange rate close to the rate published on BlueDollar.net (expect to pay a little less than the published rate).
- Calle Florida in Buenos Aires is a common Blue Dollar exchange center.
- Western Union can be used to get Blue Dollar exchange rates, but you will pay $15-30 transfer fee.
- Almost every gas station in Argentina will exchange USD for ARS, but they will give you a slightly better rate than the official published rate (not Blue Dollar rate). Use this option to get ARS as needed when you are visiting a small town. For example, we needed 2000 ARS to pay for parking near a hiking site and we drove to the nearest gas station and exchanged $20 USD for ARS.
Argentinian Government’s Response to Blue Dollar Prevalence
The Argentine government has implemented various measures to address the challenges posed by the blue dollar, including tightening currency controls, imposing restrictions on foreign exchange transactions, and intervening in the currency market to stabilize the exchange rate.
Argentina MEP rate
The Argentina MEP rate, or “Mercado Electrónico de Pagos” rate, is a term used to refer to the unofficial exchange rate used for transactions involving the local purchase of assets or securities denominated in foreign currency through the Buenos Aires Stock Exchange (BCBA).
Argentina Blue-Chip rate
Where the MEP rate is used for local transactions, a blue-chip swap rate, or “dólar CCL” is used for overseas transactions.
Foreign Tourist Dollar Rate for Foreign Credit Cards
- Since December 2022, foreign credit cards (Visa & Mastercard) have been approved to convert currency at “foreign tourist dollar” processed at MEP rates.
- While it is slightly below what you’ll get with the Blue Dollar cash rate, it is very convenient compared to carrying around millions of Argentinian Pesos (only if businesses accept credit cards without a mark up).
- For example, if your Visa/Mastercard is charged at the official rate (e.g., US $20) at a restaurant, you will be automatically reimbursed for the difference (US $8) 5-7 days later.
- There is no Foreign Tourist Dollar exchange rate for the EURO (it only exists for USD).
- This exchange rate may not work if you use a Visa or Mater Debit card.
- The new exchange rate is designed for foreign tourists, but Argentine residents who have foreign credit cards can also take advantage of it.
- This exchange rate is determined by the credit card network (Visa, Mastercard, etc.)
- If an individual uses a credit card to make a purchase denominated in US dollars on a platform where the MEP rate applies, the transaction would be subject to the exchange rate provided by the credit card network at the time of processing.
- This rate may differ from the MEP rate due to various factors such as currency conversion fees, network fees, and any markup applied by the card issuer.
Do you always get partial transaction refunds when using Visa or Mastercard in Argentina?
When it comes to credit card transactions and the MEP rate in Argentina, it is important to understand how credit card transactions are typically processed in the country.
- A partial transaction refund from Visa/Mastercard only works if the company charges you at the official rate (you make a small profit).
- You will not get any partial refunds if the company charges you at MEP rate. For example, if a restaurant has prices posted in USD next to ARS or offers you an “English Menu” then you will probably pay at the MEP rate (you will lose some money).
- Since the massive devaluation of ARS (December 12, 2023), the gap between the official exchange rate and the tourist exchange rate is smaller and more businesses are charging MEP rates.
- We have made several credit card purchases in Argentina (e.g., airfare and restaurants) and have not received any partial credit card refunds to date (almost 2 weeks since the purchase).
Conclusion
Cash is the king for foreigners in Argentina and you can get more ARS via Blue Dollar compared to the officially published exchange rate. The difference is more apparent with larger spending on accommodation, restaurants, shopping and tourist activities that can be paid for directly with cash. In our case, it did not make much difference since our stay was paid with points, and we used cash & credit cards to pay for dining.