15% surcharge on foreign transactions on Argentine credit cards starting Sep 1

[expatinowncountry]

I think it is the case. My point is that the central bank in Arg is having to pay 6.37 pesos for each dollar coming to it via the plastic interchanges. I believe it is absorbing the losses on the exchange spread. It seems to me the surcharge is an attempt to cut it's losses.

I don't dispute that the 15% surcharge is going to the central bank of Arg. It is still losing money on the use of the cards. I do not believe the individual card issuing banks are covering the spread. If they had to do so, the cards would have been all cancelled as soon as that spread exceeded their profit on the cards. No one would have Arg bank issued cards usable outside the country.

The Central Bank in Argentina does not operate on the basis of the black market rate. What are you talking about? If you are an exporter in Argentina, when your exports go out you have to sell the foreign currency you get for the stuff you sell at the official rate (liquidación de exportaciones). The government wants a cheap dollar so it can give less pesos to the soybean exporters...

 

[earlyretirement]

This country is totally FUBAR. What amazing asshole thing will they think of next.

EXACTLY. That is the really frustrating thing.. You definitely know that there IS a NEXT thing coming. There has been a rapid fire steady chain of new restrictions and controls.

It's so bad that the locals are just waiting to hear the next one and hope it's not as bad as the last. They have the locals trained into thinking "oh that isn't so bad because it could have been worse" mentality.

That's when you know things are horrible. The sad truth is it will get worse before it gets better.

 

[nicoenarg]

Prunes61 and others who think this isn't so bad and not only that but are trying to justify these moves--I'm thinking its one of two things: Either you guys don't have any idea what you're talking about or you're just so numb to all the changes that you just want to tell yourself "it ain't that bad, it could be worse" (like earlyretirement said).

There shouldn't even be a debate about this. It is 15% extra charge where there should be exactly NO charge. The only reason this was introduced is that they are unable to block credit card transactions internationally (like they did with debit cards) so they come up with this. There is no logical explanation embedded in the principles of Economics. This is plain theft from the people who are able to both acquire and use their credit cards internationally.

Let's stop fooling ourselves with excuses that aren't even logical and accept the fact that this government is powerful enough and bold enough now to pull off anything without having to give any reason for it whatsoever.

The Argentine people are numb. Very few care about what's going on and the rest are perfectly trained and experienced in shrugging their shoulders and reminding the ones who complain "ah, this is Argentina!"...yeah, we know it already!

 

[prunes61]

The Central Bank in Argentina does not operate on the basis of the black market rate. What are you talking about? If you are an exporter in Argentina, when your exports go out you have to sell the foreign currency you get for the stuff you sell at the official rate (liquidación de exportaciones). The government wants a cheap dollar so it can give less pesos to the soybean exporters...

I cannot believe that the official dollar price is what is used to reimburse dollar purchases made by Arg bank cardholders. VISA, Mastercard, the US merchant banks are not going to accept a credit of 4.6 pesos to reimburse them for a dollar sale. They may accept dollars from the Arg central bank, but not 4.6 pesos per $. In effect, the central bank of Arg is selling dollars for 4.6, not a healthy business.
Incidently, what is to prevent someone going to the US, buying US$10,000 worth of gold using their Arg bank issued plastic (which will now cost them 52,900 pesos), returning to Arg with the gold and selling it for 63,700 pesos. And doing that every day? And then hiring 100 people to do it for them every day?

 

[BXpat]

and I thought 3% Foreign Transaction Fee on U.S. credit cards was annoying.

 

[solerboy]

I cannot believe that the official dollar price is what is used to reimburse dollar purchases made by Arg bank cardholders. VISA, Mastercard, the US merchant banks are not going to accept a credit of 4.6 pesos to reimburse them for a dollar sale. They may accept dollars from the Arg central bank, but not 4.6 pesos per $. In effect, the central bank of Arg is selling dollars for 4.6, not a healthy business.
Incidently, what is to prevent someone going to the US, buying US$10,000 worth of gold using their Arg bank issued plastic (which will now cost them 52,900 pesos), returning to Arg with the gold and selling it for 63,700 pesos. And doing that every day? And then hiring 100 people to do it for them every day?

Internation banks work in dollars not pesos.

There are strict limits on the movement of gold and you would have to declare it to customs and pay a duty. (Or smuggle it in)

 

[nicoenarg]

I cannot believe that the official dollar price is what is used to reimburse dollar purchases made by Arg bank cardholders. VISA, Mastercard, the US merchant banks are not going to accept a credit of 4.6 pesos to reimburse them for a dollar sale. They may accept dollars from the Arg central bank, but not 4.6 pesos per $. In effect, the central bank of Arg is selling dollars for 4.6, not a healthy business.
Incidently, what is to prevent someone going to the US, buying US$10,000 worth of gold using their Arg bank issued plastic (which will now cost them 52,900 pesos), returning to Arg with the gold and selling it for 63,700 pesos. And doing that every day? And then hiring 100 people to do it for them every day?

I can't believe electrons exist. I mean, I've never seen them! But then again, I do believe the people who know what they're talking about when they tell me that they exist.

Likewise, expatinowncountry is an economist, I'd actually take his word over your beliefs.

 

[Gringoboy]

"ah, this is Argentina!"...yeah, we know it already!

And how many times have we all heard that lame comment/excuse?
Que vamos a hacer? Es lo que hay...etc etc etc.
It don't wash any longer, especially when we are all being shafted up the rear end every day that passes.
And yes, Nico is right. They are all so omnipotent now that they don't actually have to either justify new measures or even give advance warning; which in itself is extremely worrying.

 

[earlyretirement]

And how many times have we all heard that lame comment/excuse?
Que vamos a hacer? Es lo que hay...etc etc etc.
It don't wash any longer, especially when we are all being shafted up the rear end every day that passes.
And yes, Nico is right. They are all so omnipotent now that they don't actually have to either justify new measures or even give advance warning; which in itself is extremely worrying.

Exactly. CFK and her administration use bullying and threats and even jailtime to anyone that dares to go against them. From the little guy that does a newspaper interview, to exchange houses, to even simple economists that dare say that the true inflation isn't the paltry, low, artificial, corrupt, fake rate that the government says it is.

Unfortunately the reality is until they can get an effective, ethical, intelligent leader in place, Argentina will never change. It will be chaos between 10 year or so periods of relative non-chaos.

 

[mariposa]

The only reason this was introduced is that they are unable to block credit card transactions internationally (like they did with debit cards)

this is also incorrect information. i use my arg. debit card internationally all the time. (just bought 3 cases of wine with it, this morning, in nyc!)