All of Argentina’s dollar exchange rates, explained

Do you know your Qatar dollar from your Coldplay dollar? Your blue dollar from your blue chip swap? Here’s a guide from the Herald

If you are traveling to or from Argentina, you might have Googled how much the peso is worth. And chances are that you didn’t get a straight answer.

That’s because Argentina’s foreign exchange market is far from straightforward. Governments have added layers of restrictions on foreign currency operations over the years, spawning a myriad of different exchange rates.

Since 2019, Argentines have not been allowed to go to a bank and simply buy all the dollars they want. So, they often get them at informal exchange houses at the higher “blue dollar” rate. They can turn to financial markets to get the greenback, but that gives them the “MEP dollar” and “blue-chip swap” rates — though the latter is not the same as the “blue dollar.” Confused yet?

If not, you will be: there are also different exchange rates for credit card operations, which are not the same if you want to pay for, say, a Coldplay concert or Netflix. There are specific exchange rates for those, inventively dubbed the “Coldplay Dollar” and “Netflix Dollar”.

All these restrictions stem from the same problem: an international reserve scarcity crisis intensified by 2023’s historic drought and economic mismanagement. Even President Javier Milei, who took office with promises of adopting the U.S. dollar as the national currency, has not lifted the restrictions on buying the greenback. At the time of writing, Argentina’s net international reserves are negative US$2 billion (accounting for the BOPREAL importer bond maturities next year), meaning the country is beyond broke — in fact, the government would have to raise US$2 billion to be broke.

Who can buy dollars at the “official rate”? Why is it called the “blue dollar” if the banknotes are green? Is the “Coldplay dollar” overrated? Without further ado, here is your guide to navigating the murky waters of the Argentine foreign exchange market.

Official exchange rate (Dólar oficial)

The official “wholesale” exchange rate is the cheapest and largest market. All “wholesale” transactions are done directly with the Central Bank and every other official rate is derived from this one. “Where can I get this rate?” you may ask. I hate to burst your bubble, but it’s used almost exclusively in international trade. 

Compared with the parallel rates, exporters get fewer pesos for every dollar of income and importers have to spend fewer pesos for every dollar of goods they buy. That’s why, during the previous administration, you often heard of companies getting caught exaggerating their imports — to access more cheap dollars — or under-declaring their exports. The “gap” between the official exchange rate and the others is called the brecha, usually used as a shorthand indicator for the Argentine economy’s well-being (although far from the only one). 

After devaluing the currency by more than 50% in December, the government has stuck to a “crawling peg” policy to manage the exchange rate. While pegging a currency to the dollar means setting a fixed exchange rate, the crawling peg means the currency is gradually devalued by a tiny amount set by the government. Milei has promised to devalue the currency by 2% a month.

Savers’ exchange rate or “Solidary” exchange rate (Dólar ahorro or solidario)

The “dólar ahorro” (savings dollar) is the rate Argentines get by just exchanging pesos for dollars at a bank or exchange house into their domestic bank accounts. It’s the official exchange rate plus 60%, which derives from a combination of two taxes. The current value of the dólar ahorro is AR$1,400 — while it used to be cheaper than other ways of accessing the greenback, now it’s the most expensive one. Savers can claim part of one of the taxes back at the end of the year — if they can figure out the byzantine systems of the tax bureau (Our sister publication, Ámbito, has a seven-step guide if you’re interested).

Savers can buy up to US$200 per month, a quota set by Mauricio Macri’s government in 2019 to stave off a bank run.

However, not everyone can access the dólar ahorro. Scratch that, virtually nobody can. Restrictions on accessing dollars for personal savings are usually called the cepo — Spanish for “clamp.”

Previous governments barred various groups of people from purchasing US dollars in the official market. The list includes workers whose salaries were partially paid by the government or received emergency welfare during the COVID-19 pandemic; people who are on welfare programs; investors who have bought US dollar bonds or cryptocurrencies; and people whose utility bills are subsidized by the government, among others. 

Blue dollar (Dólar blue)

The “blue dollar” refers to cash dollars bought and sold informally. This exchange rate has its own ecosystem — people who sell it on the streets are called arbolitos, Spanish for “little trees.” Informal exchange houses are called cuevas (caves).

Restrictions on buying the dólar ahorro are the main reason Argentines resort to the “blue dollar.” It’s also motivated by pervasive distrust in the banking system, which deepened after the 2001 crisis, when the government limited cash withdrawals and then forcibly exchanged US dollar deposits for Argentine pesos.

Hence, many Argentines prefer to store their crisp banknotes at home — last year, the INDEC statistics bureau calculated that they had some US$249.5 billion under their mattresses.

The “blue market” is not big, but most media outlets publish its value and it can be a bellwether of the economic mood. Depending on which side of the political divide you are on, the “blue dollar” can be called “free dollar” (since it’s how citizens can access the currency without any restrictions) or “illegal dollar” (as it is technically illegal, although the president has encouraged people to buy them). 

There’s no consensus on where it got its name. Some say it refers to a special marker used to detect counterfeit bills, which turns dollars blue. However, most people agree that it is called “blue” to avoid using the term “black market,” which could be interpreted as racist. So this could mean this illegal exchange rate is…kind of woke?

MEP dollar and blue-chip swap rate (CCL)

There is yet another way Argentines access the treasured exchange rate — by buying and then selling national sovereign bonds. The maneuver consists of buying peso-denominated bonds in the financial market and then selling them for dollars. The implicit rates of exchange at which those operations are carried out are the “financial exchange rates” — the MEP dollar, if they are done in the local market, and the blue-chip swap rate (also known as contado con liqui or CCL) if they are done in the international market.

That may sound complicated, but given the appetite this country has for the greenback and the ongoing restrictions, growing numbers of people are investing in the market through apps. Once relatively obscure terms, “MEP” and “blue-chip” are now mainstream and in the last couple of years, everyone has become a trader.

“Netflix” and “Qatar” dollar

US dollars aren’t just for saving. Sometimes, Argentines need to pay for things priced in dollars with their debit or credit card, like streaming services, travel abroad, or that really cute 1-1 scale My Little Pony figurine that I saw on eBay last night. Enter the “card dollar” or “tourist dollar.” Its value is the same as the “saver’s dollar” (AR$1,400 at the time of writing).

Until October 10, the previous government differentiated exchange rates popularly called “Qatar” and “Netflix” for overseas and domestic expenses respectively. The “Netflix” name is pretty self-explanatory, and the “Qatar” dollar was enforced in late 2022 when Argentines traveled en masse to a certain Middle Eastern country for a certain sporting event.

However, the previous administration unified the values for the Qatar, Netflix and ahorro exchange rates. Since then, you get the same exchange rate whether you watch the cash grab 2022 remake of “Pinocchio” or go hug a Disney World cast member dressed as the mythomaniac wooden puppet in Florida. Which is a normal state of affairs, I guess.

Foreign tourist dollar

Although technically not another exchange rate, the “foreign tourist dollar” is a measure launched by the previous administration. It means that tourists — and anyone else with a foreign credit or debit card — get the MEP rate on purchases in Argentina. And no, it’s not the same as the regular tourist (or Qatar) dollar. Before the foreign tourist dollar was introduced, purchases were processed at the official rate (approximately 15% lower than the MEP rate, although close to 100% less when the measure was first launched).

The government did this to make the country cheaper for tourists and dissuade them from dangerously spelunking in “caves” or climbing “little trees.”

Coldplay dollar

When Coldplay sold out nine concerts in Buenos Aires last year, people started wondering which exchange rate they would use to take home the pesos thousands of Argentines paid to listen to “Fix You” and “Viva La Vida.”

The rules would have meant they got the official rate, but businesspeople in the entertainment industry protested and got a special exchange rate for the sector, which was the official rate plus 30%. They could have settled for the official rate, but hey — if you never try, you’ll never know what you’re worth.

Temporary exchange rates

The previous government used to launch exchange rates with expiry dates. These included the “Vaca Muerta” dollar, the “malbec” dollar, and the various “soybean” or “agro” dollars — beneficial rates aimed at oil, wine, and agricultural exporters. However, all of these exchange rates are now part of the great rates chart in the sky. And, if Milei delivers on his promise of dollarizing the economy — or at least lifting the cepo — they all will be.


All Right Reserved.  Buenos Aires Herald