Foreign tourists spent US$164 million in January, a 481% hike compared to the same month last year, according to a report by the Central Bank. It saw the highest spending on “trips and tickets” in two years, a category used by the Central Bank that includes all purchases made by non-residents.

The report stresses that the spending surge resulted from the “foreign tourist dollar” rate implemented at the beginning of November. The preferential rate allows purchases made with foreign VISA and Mastercard debit, credit, and prepaid cards to be processed at the MEP dollar rate (355 pesos per dollar at the time of writing) instead of the official rate (195 pesos per dollar).

The tourist dollar was launched on November 4th as a way to make the country cheaper for tourists and dissuade them from going to illegal exchange houses that offer the unofficial “blue” dollar exchange rate. The government also hoped the measure would boost reserve accumulation.

Federico Cofman, Mastercard’s Country Manager for Argentina and Uruguay said back in January that foreign card transactions increased by 25% in value and 28% in volume within a week of the new rate’s implementation in November. According to him, tourists seem to be getting the hang of it.

“In the beginning, we saw the typical card payments, such as airlines, restaurants, and hotels, which are usually expensive,” Cofman said “But over the course of the weeks, we saw a bigger impact in sectors such as supermarkets, general stores, clothing, and transportation.”

In December, foreign card spending in the country was US$108 million, a 78% increase compared to November.

Government sources told the Herald that the tourist dollar’s greatest takeup was from visitors from the United States, Brazil, Chile, and the United Kingdom, in that order. 

However, Argentines spent US$666 million abroad in the same category, meaning that there is a tourism trade balance deficit. Argentine spending overseas only grew by 51%, compared to the 481% surge for visitor spending in Argentina.

To counteract this, since October 12, the government instated a monthly US$300 cap for credit card expenditure for Argentines abroad. When surpassed, a 25% surcharge is automatically applied. This percentage is added to two other surcharges already in force for purchases made in US dollars — the PAIS foreign transaction tax (30%) and the Income Tax (45%).