The Trick to Living Rich in Argentina Today

What I’m about to tell you… well, it’s technically illegal.

But what’s a little crime between friends?

Our story starts in the mid-80s when a cabbie pulled to the curb in front of a Buenos Aires steakhouse. As my stepfather handed him pesos to pay for the ride, the cabbie said, "Change dollars? Good rate."

My stepfather Tony, thinking he was a man of the world because he’d traveled to a handful of countries, thought the deal sounded great. He’d checked the black market rate with the bellhop at the hotel earlier in our trip, and the cabbie’s offer was slightly better. So, he confidently handed over two US Benjamins and retrieved a handful of pesos in return.

He stepped out into the Argentinian night, a cocksure American who believed he’d just reduced his family’s cost for a vacation in Buenos Aires.

Problems, as you might already suspect, arose later, as he tried to pay the bill for four steaks, sides, and a bottle of wine that he, my mom, and my grandmother shared at what was then one of BA’s top steakhouses. Tony handed enough pesos to the waiter to cover the bill and a nice tip.

The waiter looked at him, confused: "This is old currency we stopped using last year."

New pesos had replaced the old currency at a 1:10,000 rate, meaning Tony had traded $200 for currency worth two cents. Argentinian monopoly money.

Your 101 Guide to Argentina’s Blue Dollar

Such are the disastrous shoals when you’re navigating the eddies of black market currency trading in a place like Argentina, which has changed currencies four times since 1970. Each changeover marked a devaluation, as governments of the day forced locals to swap bad currency for what would ultimately be worse currency.

The most recent switch happened in 1992, when Argentina dumped the austral after six failed years and adopted a new version of the old peso. At that time, each new peso was pegged to the dollar at a 1:1 rate. Owning a peso was as good as owning a greenback.

Only, not so much, really.

Over the intervening decades, the new peso lost its peg and has continually ground ever lower. The most recent coup de grâce for one of the world’s most troubled currencies arrived last December, after Argentines elected their new president, a hard-right libertarian. Javier Milei’s a proponent of anarcho-capitalism—what I’ll describe as "burn-down-the-state" capitalism. One of his first official acts was to radically devalue the peso by more than 54%.

Right now, pesos that once converted at a rate of 1:1 with the dollar now trade at 825 to the dollar. But that’s the official, government-controlled exchange rate, and in Argentina the savvy know to exchange currency at the so-called "Blue Dollar" rate.

This is where we now veer into criminal activity. See, the Blue Rate is technically the black market, and the black market is, of course, 100% illegal.

However… the Argentine government willfully turns a blind eye to Blue Rate transactions because the country desperately wants foreigners to pump dollars into the local economy. Right now, the Blue Dollar rate is bouncing around between 1,150 and 1,250 to 1… meaning Americans heading to Argentina on holiday, or relocating to the Land of Tango as digital nomads or mobile retirees, are going to find that turning their greenbacks blue will allow them to live more richly than they might have expected.

The savvy know to exchange currency at the ‘Blue Rate.’

Of course, that doesn’t mean you won’t feel the impacts of Argentina’s latest crisis du jour. You absolutely will. But if Big City living at country-road prices appeals to your wallet’s sensibilities, then Argentina, despite a financial crisis, might be a great option. Your nest egg or income will go a lot farther.

Live Richly in "The City of Amazement"

Patagonia, Argentina. |©iStock/Kalistratova

The sad irony in all of this: Argentina once competed with America for Western Hemisphere supremacy.

That was in the early 1900s. Argentina was the fastest-growing economy on the planet and the peso was considered the most valuable currency in the world. American visitors at the time called Buenos Aires "the city of amazement," and a popular phrase of the day to denote wealth was to be "rich as an Argentine."

Today, Argentina is a basket case because of its abysmal governance over the last many decades. Still, it’s a fabulous country that is extremely affordable for Americans. But you must keep certain best practices top-of-mind when traveling or moving to Argentina.

At the very top of that list: Whatever you do, do not stick money in a local bank account, and do not hold your pesos very long. Inflation in Argentina is a beast. At the moment, it’s running north of 200% annually. If another devaluation does materialize (a likely scenario), any pesos you hold will instantly buy less—while any dollars you hold will instantly buy more.

Also, don’t use an ATM. These machines operate at the official exchange rate, so you’re sharply—and unnecessarily—reducing the amount of pesos you’d otherwise receive for your dollars.

3 Ways to Take Advantage of the Blue Rate

La Boca neighborhood of Buenos Aires.|©iStock/SamyStClair

Be savvy when using your credit card. Purchases with US-based credit cards will receive the "tourist rate," what you will see referred to as the MEP rate ("Electronic Payment Market"). But this can get a bit confusing. Sometimes retailers will charge you the MEP rate directly. Other times, they’ll charge the government rate, but then the credit card processor will refund you the difference between the official rate and the MEP. In short, you’re getting a rebate on your credit card. But you need to know what that rebate is.

The best way to know is to make a small purchase on your credit at, say, a local coffee shop, for instance, then wait a few days—maybe up to 10 days—and check your credit card statement to see if you’ve received a credit tied to that purchase. If so, check how closely the rate you were ultimately charged compares to the current MEP rate.

Argentina is cheap—if you know what you’re doing.

The MEP bounces around and sometimes credit card processors refund you at a rate lower than the current MEP (you’ll find the tourist rate posted everywhere—hotels, restaurants, and shops). The MEP will still be better than the government rate, but potentially much less favorable than the Blue Dollar rate.

Still, if you want the convenience of a credit card versus carrying around hundred dollar bills (which will get you the best Blue Rate), then you’ll need to accept that sometimes you’ll receive an inferior rate—though that’s still better than the official rate. Note that this does not apply to debit cards or cards like Revolut. You have to use a true credit card from Mastercard, Visa, American Express, etc.

If you’re going to be in Argentina for a while, you’re not likely to carry with you enough dollars to cover your ongoing costs. The best way to bring new dollars into the country is through Western Union. The global wire-transfer company will convert them at the Blue Rate. As I was writing this, I popped onto WesternUnion.com. The rate was 1,243 pesos per dollar. (Use the main Western Union offices, not the bodegas and shops that display a Western Union sign.)

If you want to be quicker about it, ask hotel staff or any trusted friends you meet in Argentina where you can find the nearest cueva, or cave. That’s where Blue Dollar transactions take place. Or just listen for the callers on the street not-so-quietly announcing "Cambio! Cambio!"—Spanish for "money change." Just be aware what the rate is that day. You can check it at bluedollar.net.

And finally, be fully cognizant of what new and old pesos look like. You don’t want to follow in my stepfather’s footsteps, and convert hundreds of dollars for pesos worth pennies.

Inflation Under The New Presidency

It didn’t take long for prices to soar following the swearing-in of President Milei. Once the president devalued the peso and stripped away cost regulations, the entire country instantly became more expensive. Walking into restaurants became a crapshoot. Don Julio, the well-known (and now Michelin Star) steakhouse, almost instantly doubled, or in some cases, tripled its prices. Many took to social media to call out the restaurant for suddenly charging over $100 USD for certain cuts of meat. The restaurant has since pulled back (slightly), but is no longer the value it once was.

Grocery stores, specifically local convenience stores, have increased prices across the board. The cost of bread has doubled (a regular, packaged loaf of sandwich bread now runs around $2+), and many basic items now have a similar price point to the US.

It’s not unusual to find convenience stores no longer list prices of goods, so it’s anyone’s guess what a final total will amount to when grabbing a few essentials. I no longer shop at the store nearest to my apartment because of this, and because I’m pretty sure they make up prices on the spot. So now I exclusively shop with stores that clearly list prices.

Gas prices shot up nearly 40% overnight. It has taken some time for taxis and Uber to reflect these price changes. And while still extremely affordable compared to the United States, it’s something to consider when budgeting.

This also includes riding the metro or bus system. The exceptional public transit service in Buenos Aires has long been subsidized by the government, but those subsidies have been stripped, with prices quadrupling in places.

Again, still very much affordable (a quarter for a ride on the subway instead of a nickel), but Argentina is getting more expensive by the day.

—Greyson Ferguson