The “Blue Dollar” Black Market

We try to be good tourists and not break the law. We almost got caught eating on the subway in Singapore once (a $400 fine!, but that’s the extent of it. That is, until we arrived in Argentina last week. The currency in Argentina is the peso, and it has been pretty volatile over the last few years. We even heard the government artificially keeps the price of the McDonald’s Big Mac price low to give the country better standing on the Big Mac Index. Recently heavy inflation has set in, and the central bank prevented Argentinians from buying dollars. Because of this, a secondary, underground, unofficial financial market, called the “blue market” has emerged for people wanting to buy and sell dollars.

Due to the high demand, the exchange rate at the blue market is around 11 pesos/dollar, vs. around 7.5 pesos/dollar at the official bank rate. What this means, interestingly enough, is that if we bring dollars into the country, we can get more pesos from the blue market than if we use our ATM card, which gives the official bank rate. This is backwards from most every other country, when exchanging USD for the local currency will give you a lower rate than an ATM, which gives you the bank rate (hence, we always use our ATM card to get cash). For example, consider if we booked a hotel room that cost 750 pesos. If we withdrew the 750 pesos from the ATM, that would cost $100. However, if we brought $70 in cash, exchanged it on the blue market, we’d be able to get the hotel room with a few extra pesos to spare! So using the blue market is a savings of over 30% for almost all purchases.

If this sounds illegal, you’re right, it is. Technically, exchanging dollars on the blue market is against the law, but literally almost every person in the country does it, and the police look the other way (again, literally). Keep in mind, we are good little boys and girls so we haven’t purchased anything on these markets, so this is all theoretical…

We went with an Argentinian friend to see what they were like, expecting to walk down back alleys and knock on a door requiring a secret passage. Instead, we went to a legitimate storefront that looked like any other exchange place (except you needed to be buzzed in). Some are nicer than the one we went to, with bill counters and fancy LED boards. If you can’t find a blue market exchange, you can walk down some of the main streets downtown and there are tons of people shouting, “Cambio! Cambio! Cambio! (Change! Change! Change!)”. They will take you to their store (clothing, souvenirs, etc) and exchange with you there. We would suggest going with an Argentinian if you want to make sure aren’t getting ripped off and are getting the best rate. After all, it’s still an illegal market, so you can’t exactly go to the police if you get scammed. Common scams are giving you a really low rate, passing you fake peso notes, and/or short-changing you (saying you only gave them $10 vs $100, for example), so be really careful and always count your bills!

Speaking of the police, we noticed that most of the street exchangers were changing right in front of police officers, and the storefront we visited had police walking by regularly. We highly doubt these places are unknown to the officers; in all likelihood, they just look the other way. Exchanging on the blue market was recommended by every Argentinian and tourist we talked to, and seemed to be one of the safest laws to break for tourists. Plus if it saves you 30% on all your costs in Argentina, it’s not a bad deal at all. Just be careful – we wouldn’t condone any illegal activity in any country, this option seems pretty safe if you know Spanish or know a friend that can help you exchange.

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