NickB

No, they are not. They can be (and are) freely used in the UK but that does not make them "legal tender". In any event, they do not have to be accepted by a shop (or anyone) if they do not want to although in practice they are almost universally accepted (unlike Northern Irish banknotes which are sometimes frowned upon in England).

Siempre Viajando

I'm traveling with my family overland from Santiago to Córdoba this weekend. I was planning to buy AR$ in Santiago figuring I'd get pretty close to the blue dollar rate, but after hunting around today the best I found was a rate of AR$1 = CLP$51, which at the current exchange rate of US$1.00 = CLP$590, is equivalent to only US$1.00 = AR$11.6, considerably under the blue rate.

So I changed a minimum amount just to have some pesos with me when we cross the border. Fortunately the owner of the hotel in Mendoza where we will be staying Saturday night has offered to change dollars at a rate of US$1.00 = AR$13.7, which is close enough to the blue rate that I'm not going to quibble. The vacation looks pretty cheap at the blue dollar rate, especially compared to what things cost in Chile!

Does anyone know if most hotels are changing dollars at the blue rate? Are restaurants? For instance, on the way back from Córdoba we're going to stay at the Hyatt in Mendoza. Would a major chain like that accept cash payment in US$ and give me something close to the blue rate?

If the answer is no then I'll likely change enough dollars on Saturday to cover the entire trip...but I'd prefer to dole out the US$ in small batches as we go, to avoid overdoing it and returning to Chile with excess soon-to-be-worthless pesos.

Gaucho100K

The Hyatt will take Pesos, and they will convert a US$ quoted rate at the official exchange rate, but you will have to go trade your Dollars elsewhere as I don't think they will take your US$ cash as the blue rate.

Eastbay1K

You don't want excess AR$ in Chile. EVAR. Even prior to things being as desperate as they currently are (when it was about 3 to 1, and relatively stable for some time), I couldn't get rid of them. Maybe I didn't look hard enough, but if I did find someone to take them, it would have been at a huge discount. LAN won't take them for Duty Free Sales, and haven't for quite some time, even when their magazine used to say that they would (and this was a flight from EZE).

I suggest that you ask places if they accept US$ and at what rate (when you arrive at a restaurant, etc., if they don't have something posted), and have AR$ to pay the bill just in case they don't, or not at favo(u)rable rate.

GUWonder

So they can be illegally tendered in the UK?

If you're trying to use a restricted definition of "legal tender" as defined by law in one jurisdiction, I'm not going to take issue with it.

Apparently sometimes we speak one language separated by an ocean.

That (i.e., convert a US$ quoted rate at the official exchange rate) aligns with what I've done there and will do again. Do any of the major chain hotels there follow a different practice in this regard that would disrupt this path for visitors to reduce hotel costs?

Siempre Viajando

Fully agree, what I'm trying to avoid is returning to Chile with Argentine pesos.

That said, note that when I buy Argentine pesos in Santiago, the best exchange rate I can get is approximately 20% off the blue rate. Plenty of Argentines come to Chile to visit and are desperate to unload their money, so you'd think that the money changers here (Chile) would be willing to sell Argentine pesos at close to the blue rate. But not so.

Yesterday the buy rate for Argentine pesos in Santiago was AR$1 = CLP$42. At the current exchange rate of US$1.00 = CLP$590, this is equivalent to US$1.00 = AR$14, which is slightly below the current blue rate of 14.2 (according to the La Nación website).

If I take the midpoint between the AR$ buy (14) and sell (11.6, see my post yesterday) rates in Santiago I get an exchange rate of US$1.00 = AR$12.8. This suggests to me that Chilean money changers are valuing the Argentine peso higher than the Argentine people, assuming that the blue rate as reported by La Nación represents the consensus Argentine perception of the market value of their own currency.

Hmmm...opportunity for arbitrage?

NickB

Well, if "legal tender" meant anything that is not "illegally tendered", then sweets would be legal tender in the UK since nothing prevents you from tendering sweets as payment. A trader could of course refuse sweets but they could equally refuse Scottish banknotes.
No, I am just using the normal, generic definition of legal tender,* viz a form of payment that cannot be refused in settlement of a debt rather than any specific technical meaning the term might have in particular jurisdictions. It may well be that "legal tender" means something else in GUWonder-ese but you will excuse me for not being terribly familiar with the latter.

*: sample definitions in common dictionaries;
OED: "Coins or banknotes that must be accepted if offered in payment of a debt"
Merriam-Webster : "money that is legally valid for the payment of debts and that must be accepted for that purpose when offered"
Collins: "currency in specified denominations that a creditor must by law accept in redemption of a debt"

Gaucho100K

Places like the Hyatt and Sheraton, if the staff play by the rules, are not allowed to use any exchange rate other than the official rate. They will take pesos, but do not get involved in a blue market forex transaction.

GUWonder

Not familiar with GUWONDER-ese.

Those definitions of "legal tender" don't work so well as definitions of legal tender in at least some Nordic and civil law jurisdictions.

Fortunately this is all about lawful money/legal currency, which incorporates legal tender, and not about candy to buy off people with a sweet tooth.

I'll try to unload some BOS notes in BsAs very soon, even as they aren't legal tender in the UK. My bad, even as in "ordinary everyday transactions, the term ‘legal tender’ has very little practical application" in the UK -- according to the Bank of England.

Good for those using the blue marker rates and settling hotel charges in AR$ cash.

Gaucho100K

GUWonder-- Im assuming you know this, but trading hard currency that is not the US Dollar when you are in EZE will mean increased transaction costs... and these may get even larger than usual if the changer you go to catches onto the BOS issued notes. Even Euros, while they are readily accepted here get a lesser exchange rate than do US Dollars... the more exotic your currency is, the larger the spread that is applied.

When you are in EZE... the US Dollar is still the undisputed king...

GUWonder

Indeed, especially pristine condition US$100 bills of the woven-in center blue ribbon sort (issued first in 2013 and continuing since then).

Gaucho100K

As it is clear that the Blue Dollar is here to stay... Im going to close this thread.

Cheers,
Alex / Gaucho100K
Moderator Argentina Forum