Argentina’s currency is, as of December 2024, subject to one of the highest annual levels of inflation in the world. Over the past decades, and particularly over the last five years, Argentina’s currency has devalued drastically and the cost of living for Argentinians has hit crisis level. Wages have not kept pace with the hyperinflation and, as of January 2024, sadly well over half of Argentinians were living below the poverty line.
From the perspective of a tourist in Argentina, the extent of recent inflation is most simply illustrated by looking at restaurant menus on Google maps. If a photo of the menu was uploaded in around 2022, the price of a main course in an average restaurant will usually be somewhere between 400 and 1,000 Argentinian pesos. In late 2024 the same meal will be 10,000 pesos. In other words, prices on the page have increased tenfold; looking at this in reverse, the value of the currency for the same product has decreased tenfold.
What has caused the hyperinflation?
In a nutshell, the hyperinflation was caused by the Argentinian government overspending and then attempting to paint over the cracks by simply printing more money. This is inevitably a recipe for disaster, not only causing inflation to spiral out of control but also creating a domino effect on various other aspects of the economy: banks raise interest rates, wage demands increase, and inflation consequently stays high, fuelling the fire rather than solving the problem.
During 2024, the inflation level in Argentina seemed to be slowing tentatively but it is still very high in comparison to global averages and will likely take a while longer to settle to a stable level.
Does the inflation mean that Argentina is cheap for European or American tourists?
As of December 2024, Argentina cannot be described as a “cheap” holiday destination for European or American tourists. Prices have increased to keep up with inflation and on many counts are increased pre-emptively in anticipation of further inflation, and are regularly adjusted upwards before they have a chance to be overtaken by the decreasing value of the peso.
Depending on where you are in Argentina, on average the cost of a supermarket shop or a meal out is approximately on par with prices in, say, Italy or Spain. For example, going out for a main meal and a soft drink in a run-of-the-mill restaurant will set you back about £35 for two people. Prices are not usually as high as in London, Paris or any major American cities, although seeing prices at that level is not out of the question.
Like most countries, prices will also vary depending on where you are in Argentina. Patagonia is at the expensive end – it is arguably the most touristy area of the country in addition to the need for many products to be imported due to the area’s remoteness. In smaller towns in between larger cities, prices will be slightly lower.
Exchange rates
Confusingly, Argentina has multiple exchange rates. The red rate is the official exchange rate and the blue rate is the unofficial but more favourable rate. If you pay by card (more on this below), you often pay at the higher red rate whereas, as explained below, there are ways to withdraw and spend cash at the lower blue rate.
The difference between the two rates has decreased in recent months but it is still worth being aware of them.
Cash in Argentina: the best way to pay
Argentina is a cash-heavy country and it is the most cost-effective way to pay for things as a tourist.
- Western Union
By far the best way to obtain cash in Argentina is via Western Union. You can send yourself money from your own bank accounts and collect the sum in cash from a Western Union branch, showing your passport as proof of identity. A fee is payable for each transfer, with the first fee being the lowest, so it is advisable to transfer larger sums to yourself, especially for your first transfer. Even with the transfer fee, the fact that Western Union pretty much matches the blue rate means that using cash in this way is still very often more cost-effective than paying by card.
If you are financially savvy, you can time your trip to Western Union for a day when your country’s currency is particularly strong against the peso to maximise the amount you can withdraw.
Due to the hyperinflation, as of November 2024 the highest value note in Argentinian currency is 10,000 pesos. This means that when you collect your cash from Western Union you will likely be given several bricks of cash, largely in 1,000- and 2,000-peso notes. It is advisable to bring a money belt or even a handbag when collecting your cash as it will not fit in your wallet!
When in a city, you can usually rely on Western Union to be stocked with enough cash to supply the sum you have requested. However, in smaller towns the Western Unions can run out of cash, a situation which is often combined with the paradox that many shops and restaurants in those towns will only accept cash, meaning you find yourself unable to buy anything at all. It is therefore advisable to arrange to collect cash pre-emptively when you find yourself in larger towns or cities.
- Cambios
Another potential option is to use money exchange facilities, or cambios. It is advisable to use only official money exchange bureaus rather than approaching one of the numerous cambio hawkers on the streets of many of Argentina’s cities. More often than not, these people are working on the black market, seeking to obtain US dollars which are viewed as more stable and preferable to the peso.
If you do need to use a cambio, you can exchange US dollars or sometimes euros but be aware that they tend to prefer larger notes. It is rarer to be able to exchange other currencies but you may be able to find places to exchange other South American money, particularly in tourist towns.
- ATMs
If you are really stuck, you can withdraw cash from an ATM. The reason this should be a last resort is because the withdrawal fee is usually over 10,000 pesos (nearly £8 as of November 2024) and there are low limits on the amount you can withdraw, so this is not a cost-effective way to obtain cash in Argentina.
Paying by card in Argentina
It is possible to pay by card in most supermarkets, many restaurants and a fair proportion of hotels and hostels.
However, although it is more convenient, payment by card is less cost-efficient than paying by cash in Argentina. Card payments are usually charged at the red rate (although you sometimes later receive a small refund reducing the exchange rate to the blue rate) and you might also be charged fees by either your bank or the retailer seeking to recover their own costs of their customers paying by card. Card payments also sometimes attract VAT, whereas cash payments tend not to, although this does not appear to be a consistent rule.
It is in any event worthwhile keeping a fairly large stock of cash on you, to the extent you feel safe doing so, to avoid being caught short. In particular, many hotels and hostels prefer to receive payment in cash rather than by card. As those costs are likely to be larger than other single items you purchase, it is best to assume that you will be unable to pay by card and to pay a visit to a Western Union in advance of checking in if possible. If you do not have enough cash on you at check-in, however, hotels will often be content for you to pay the following day.
Confused?
The money situation in Argentina is not straightforward. Day to day you do not need to know the details of the exchange rates but if you follow these three top tips then you should be able to make the best use of your funds:
- Ensure you have cash on you at all times.
- Pay by cash in Argentina whenever you can, balancing this with the feasibility and frequency of trips to Western Union and the relative convenience of paying by card.
- Only use an ATM as an absolute last resort.
Leave a Reply