I doubled my money with a ‘black market’ exchange rate

[MilHojas]

I just traveled to Argentina — and doubled my money with a 'black market' exchange rate

Hyperinflation has fueled the creation of multiple exchange rates in Argentina, where cash is king. There's a legal way for tourists to get a preferential rate.

www.cnbc.com

A legal exchange rate influenced by the black market

Alberto and Sergio Massa should take note of this

 

[anouarman]

Basically he is just got the value for his money when exchanging at the blue rate as everything here is priced at the blue.

 

[Quilombo]

Whoever wrote and edited that article should be fired... out of a cannon.

Even BuzzFeed has a better basic understanding of economics than this guy and his editors which is surprising coming from CNBC.

Hyperinflation

The consensus amongst most economists is that hyperinflation is reached with a monthly inflation rate of 50%+ occurs; despite the disaster that is our economy right now, we're not at that point yet. INDEC is going to say 6%-7% I'm guessing for February (and realistically it's closer to 10% in my empirical POV) but even at double these estimates we're still not in a hyperinflation cycle.

Doubling His Money

The author didn't "double his money" because $1 USD is not worth $200 pesos; show me a single person or business in Argentina that will sell you $1 USD for $200 and I will take every payday loan I can in pesos and buy all their stocks of dollars today.

And as anouarman said, little to nothing here is priced in the BCRA dollar because nobody can access it or use it.

CCL Exchange Rate

The author is confusing the black market exchange rate, the blue, with the CCL, which WU uses as it's reference point.

For one, the CCL is what the official exchange rate would more or less be without the cepo because it's a market determined exchange rate with now limited intervention by the government. The reason I say now limited is because previously, we all likely remember how the CCL and WU exchange rate was wayyyyy below the blue in 2020/2021. Why? Because Alberto was having the BCRA intervene and piss away millions of USD on buying back pesos to keep it artificially low (by increasing the supply of dollars in the CCL market) instead of rationing the dollars for medicine imports or key manufacturing sector parts that we truly need. Thankfully the IMF told them they couldn't do that anymore (one of the few times I'll praise the IMF) so now that's why you see the CCL trending above the blue now.

Final Thoughts

I get Argentine economics is hard to understand, I'm on year 10 of living/visiting here and even I don't understand all the ins and outs, but don't write an "explainer" article if you can't even get macroeconomic terms correct like hyperinflation, you're making yourself look like an ass.

 

[FrankPintor]

It's not just what Quilombo wrote, but the whole "avoid using your credit card" thing is just irrelevant now. You only go and stand in a queue for WU if you absolutely want cash (we still haven't worked out if ATMs will give you the MEP rate).

 

[Aztangogirl]

It's not just what Quilombo wrote, but the whole "avoid using your credit card" thing is just irrelevant now. You only go and stand in a queue for WU if you absolutely want cash (we still haven't worked out if ATMs will give you the MEP rate).

I use Western Union because I want nothing to do with the banks or ATMs here. I am perfectly happy waiting in line once a month. Though I am usually first in line at 9:00.

 

[steveinbsas]

You only go and stand in a queue for WU if you absolutely want cash (we still haven't worked out if ATMs will give you the MEP rate).

Great point!!!

I do need to have a little cash where I live (to buy 10 kg garrafas of LP gas, fresh eggs, and carne picada).

My bank is in one city, 20 km from my house, and the nearest ATM is in another city 10 km from my house...in the oposite direction.

Nonetheless, I never get cash from the bank or an ATM and I don't stand in line when I do get it-

I stop at a YPF station and go right up to any one of the employes working the pumps and ask if I can "retire" some cash using my debit card. (though about once every three months I wait in very a short line and get the cash when I buy gas).

The answer is always yes and $20 K in pesos is more than enough for an entire month.

PS: I could buy the gas, eggs, and carne from one of the mimimarts one km from my house and pay with my credit card, but the gas is cheaper "off the truck" and the carne and eggs are of higher quality when I buy the meat from the local butcher and the eggs from a freind.

That is very important to me as I eat six eggs and about a half pound of carne picada per day.

 

[steveinbsas]

I should add that I never use my Visa debit card in Argentina...

...and I only use it "in the USA" (online) to make the Western Union transfers.

My WU transfers are arriving the same day and the funds ar availavble in about an hour after I pay my Argentine Visa credit card.

I made a transfer yesterday and went on a shopping spree last night.

And since last night, one of the items I bought increased significantly in price (from $2800 to $4800).

While WU increased from $374 to $390.

 

[Brian_is_here]

Great point!!!

I do need to have a little cash where I live (to buy 10 kg garrafas of LP gas, fresh eggs, and carne picada).

My bank is in one city, 20 km from my house, and the nearest ATM is in another city 10 km from my house...in the oposite direction.

Nonetheless, I never get cash from the bank or an ATM and I don't stand in line when I do get it-

I stop at a YPF station and go right up to any one of the employes working the pumps and ask if I can "retire" some cash using my debit card. (though about once every three months I wait in very a short line and get the cash when I buy gas).

The answer is always yes and $20 K in pesos is more than enough for an entire month.

PS: I could buy the gas, eggs, and carne from one of the mimimarts one km from my house and pay with my credit card, but the gas is cheaper "off the truck" and the carne and eggs are of higher quality when I buy the meat from the local butcher and the eggs from a freind.

That is very important to me as I eat six eggs and about a half pound of carne picada per day.

You are living the dream man. Once i can give up on working... So much cheap beef.