Argentina currency crisis is no joke

[hack89]

What struck me immediately was the role that physical money plays in the everyday lives of Buenos Aires residents, or Porteños. Watch out for fake bills and if possible, pay in exact change, people told us. Two different exchange rates complicated the matter further. The official rate, which the government sets at around eight pesos to the dollar, exists alongside the black market rate of roughly 11 pesos per dollar.

We had been warned by a friend about this beforehand. Bring cash, buy pesos at the unofficial rate (also known as the blue rate), or lose around 35% of your spending power, he said. We obliged, and brought a lot more greenbacks than I would normally be comfortable carrying on an international trip.

The unofficial exchanges are everywhere, easily spotted by men shouting, "cambio, cambio!" (The word for "change" in Spanish.) Some exchange services even deliver pesos to hotels to make it easier for tourists. The transaction is mutually beneficial. Visitors get more pesos, and Argentinians are protected from further currency destabilization by holding dollars

The sources of Argentina's economic troubles are well-known: sky-high inflation, dwindling foreign currency reserves, and softening exports due to a global commodities slump.

http://buzz.money.cnn.com/2014/03/17/argentina-currency-crisis/?iid=HP_LN

This story is interesting for several reasons. One is that it give some insight to what is also happening in Venezuela, which is suffering from exactly the same problems. Secondly is how ubiquitous the American dollar is overseas - it desired because it is the perfect hedge against local inflation.

[Bacchus4.0]

1. yes, I believe the black market rate is 12x official rate or so in Ven

but no-one is traveling there.