Will an Argentine default make traveling there cheaper?
Argentines are skilled in the art of conversation and well known for their chamuyo, or smooth talking. All the back-and-forth talks and meetings, however, couldn't prevent the country from sliding into default this week; while the government maintains it hasn't defaulted, according to Reuters, private banks say otherwise.
This marks the second time in 13 years the country has failed to repay creditors. While defaults are in no way good, they do happen on a sliding scale of severity. And compared to the one in 2001, when the country was more or less broke, this event isn’t nearly as bad. Yes, the economy is in recession, but it’s much healthier than it was last time around. People are still going to get paid and transit will still run, but Argentina has been branded with an economic scarlet letter yet again.
Travelers to Argentina would do good for their wallets and awareness to be well versed in how the country’s economic woes are playing out, and how they might be affected. Hint: Your cold, hard US dollars will be in high demand.
Dollars and Centavos
Tourists have been reaping the benefits of the economy’s hiccups, namely a flighty inflation rate, for some time. Whether that's fair or not — don’t hate the player, hate the game? — is up for debate, but it has been the case since 2011 when the government clamped down on foreign monies in the country and made it nearly impossible for the average Argentine to access international currencies (Read: always-in-demand US dollars and Euros).
Since then a robust black market emerged — though it’s technically called the “blue” dollar — for buying and selling the controlled monies.
The default all but guarantees the persistence of the black market and power of the blue dollar for the near future. The peso's value has already lost 25 percent compared to the dollar this year alone, according to CNN.
Your cold, hard US dollars will be in high demand.
If you want to get the most bang for your buck while traveling in Argentina, stash the cards and bring all your spending money in cold, hard cash. And then sell it. As of late, the official exchange rate has been hovering around $8 Argentine pesos to $1 USD, while the blue rate, which is what you get if you sell actual bills, is upward of $12 pesos to $1 USD.
Yeah, that's a 50 percent difference. Cash is king.
Asking at any café or tourist locale about where to sell dollars, accompanied with a knowing look, will get you headed in the right direction, whether a Western Union or cueva, as they’re called. Another place to sell: On pedestrian thoroughfare Florida Street downtown, where people unabashedly yell about buying dollars. While offering your goods here might lead you up a dimly lit stairway to a small, Spartan office and get a slasher movie looping in your head, most of these people really are just looking to do business. It stands to be noted, however, that petty theft is prevalent in Argentina, so if something feels particularly fishy, trust your gut.
While the transaction is technically illegal — they don't call it a black market for nothing — the practice is widespread and widely acknowledged.
One rumor that should be dispelled: The claim of just how “cheap” Buenos Aires is. Default or not, it’s a cosmopolitan, leading city and its prices reflect that. Sure, you dine at an upscale parrilla (steakhouse) with kilos of meat, sides, and free-flowing wine for $20, but it really only is “cheap” if you’re financing it on the blue rate.
Nosotros, The People
If you want to talk politics and current events while traveling in Argentina, most people from the taxi driver to the university professor will welcome the opportunity. Generally speaking, Argentines are up on what’s happening with the economy. Not that they're left with much choice when “default” and “vulture funds” are national buzzwords.
Argentines are also passionate, opinionated, and not afraid to get into it. If you decide to discuss the default, brace yourself for whatever barrel of monkeys you’ve opened, whether it leads to an hours-long critique of the ruling Kirchners or anti-capitalism vitriol. And if they’re haranguing US imperialism and you’re from the US, don’t take it personally.
After all, they’re still kind to Brits even though the Malvinas/Falklands thing continues to ruffle feathers 30 years after the war was fought.
On the flip side, people are understandably pissed about this default, and vocalizing their displeasure. Tweets and street art cast blame on a range of characters, including the ruling political party, hedge funds that wouldn’t accept Argentina’s payment proposal, and New York judge Thomas Griesa, who handled the default case.
In fact, the government is refusing to call it a default, as it did try to make the payment. We'll leave the technicalities to others to sort out.
Bottom line is, if you want to talk the d-word, there'll be no shortage of lively conversation. Just remember: Everything’s better over a glass of wine.