The slightly dodgy practice of exchanging money in Argentina

Having had some travel experiences under my belt, I consider myself a reasonably savvy traveller. After all, there are just some things you pick up along the way. 

Nuggets of knowledge like
- pee every chance you get
- jaywalk only if you see the locals doing it
- don't drink the water just cause you see the locals drinking it
- money exchanges at the airport are always a rip off

- anything on trip advisor rated 4 stars of lower is considered crap
- if a deal is too good to be true it's probably a scam.

So I was a little conflicted when I was doing my research on Argentina to find that if I were to bring US dollars and exchange them in the black market, I will get a much higher rate than the official exchange rate. Apparently it's quite common - there's even a name for it - the blue rate.

It just didn't sound very street smart... bring lots of cash to a foreign country, follow some random dude into an alleyway to perform a financial transaction...

Still the internet has a mix of opinions about how safe or unsafe it was. In the end I decided that since most of the warnings were about receiving fake money and not anything violent, I decided to give it a crack anyway.

So on day one, we went down to Florida St in Buenos Aires where there were lots and lots of people yelling "cambio cambio". These were the money changers. The process involved approaching one, negotiating a price then you'd follow them to their "office" which was somewhere discreet off the main street to make the transaction.

The first time was the scariest. There were lots of cops about so the first thing we had to decide on was whether to approach one in sight of a cop or not.

We decided being near cops was a good thing. Its all technically illegal to change money like this but it's expected that the police turn a blind eye to this. Being near cops = less chance the guy would get stabby.

The next bit was selecting which cambio guy looked the least dodgy to approach. This took a while - is it safer with a woman? Should we pick someone young or old? Should we discriminate based on facial hair?

Really, we were more just stalling. But just when we were about to give up, we saw a German girl and her Dad exchange some money. So we loitered around till the transaction was over and then spoke to her. She told us it was easy, she'd been all over Argentina and met other travelers who all did it and no one had a problem.

Bit more assured, we went with the guy she went with. Baby steps though - we exchanged $100 USD. And we counted the money carefully, rubbed it to figure out whether it was fake or not (not that we really knew what to look for - we didn't even have any Argentinian money at that point), subtly implied that we were staying in Buenos Aires a while and there would be more trades if this one was successful etc.

But no it all went well and we made several bigger exchanges after that with no problem. Really, aside from it needing to happen somewhere a little shady, it was all quite civil. One woman even told us how to tell if the money was fake. 

The official rate was 7.5 pesos to 1 USD, we got almost 11 pesos. It's amazing how cheap things get when your purchasing power increases by almost 50%!

It's the first time in my travels where the tourist get a better deal than the locals but as an aside it's quite interesting how this is possible at all.

As I've read, the Argentinan peso has an inflation problem. Prices are going up very fast - like 30-40% a year or something crazy. This makes it quite hard to save for the future. Also Argentinians don't tend to trust their government to manage their currency properly as in the past they've had their savings wiped out by hyperinflation.

So in order to prevent the value of their currency from collapsing due to capital flight, the government severely restricts their citizens exchanging their pesos for foreign currency. Most Argentinans cannot get access to foreign currency unless they get it illegally.

So when I go and exchange my USD for 50% above the official rate, there is some other Argentinan guy who'll want to purchase my USD for 50% more than the official rate because he thinks paying 50% more for a USD is a better deal than keeping his rapidly depreciating peso.