Go Back  FlyerTalk Forums > Destinations > Americas > Argentina
Reload this Page > So what's the situation "on the ground" with the currency crisis?

So what's the situation "on the ground" with the currency crisis?

Reply

Old May 16, 18, 11:24 am
  #1  
FlyerTalk Evangelist
Original Poster
 
Join Date: Mar 2000
Posts: 15,216
So what's the situation "on the ground" with the currency crisis?

With the Argentine peso "in freefall" (as the media says), what is the impact "on the ground" for tourists in Buenos Aires and elsewhere in Argentina? Are businesses (like restaurants, taxis, hotels, etc.) still pricing in pesos? Are those prices constantly changing? Can you get cash at an ATM? Can you pay with a credit card? Is there any disruption from all this? Protests?

Sadly, I've seen this movie before (and I guess everyone in Argentina can say the same). I'm hoping that by the time of my next visit in a few months, things are somewhat settled. I'm kind of holding off on doing any planning for my trip to see what happens. I assume nobody will sell me a future date hotel reservation in pesos right now.
iahphx is offline  
Reply With Quote
Old May 16, 18, 12:08 pm
  #2  
 
Join Date: Mar 2005
Location: Buenos Aires
Programs: Flying Blue Silver
Posts: 405
I think you are confusing the current situation with hyperinflation periods of the past or the 2001/2002 crisis, and current events are very different from those periods.

Life these days is business as usual. Everyone is pricing in pesos, prices are not constantly changing, ATMs are working, credit cards are accepted (I actually bought a plane ticket in a European website with my Argentine credit card a few days ago, and had no issues at all), and there are no disruptions other than your typical daily Buenos Aires protests.

Prices will obviously rise in many items over the next weeks, as customary after a devaluation, but this is not Argentina in the late 1980s nor Venezuela, where they change daily.

I don't see why you shouldn't plan your upcoming trip. We are at the end of the "hot sale days" here and there were quite a few nice offers (in pesos) in plane tickets and hotels throughout the country. Maybe it's worth taking a look.
Marambio is offline  
Reply With Quote
Old May 16, 18, 12:24 pm
  #3  
FlyerTalk Evangelist
Original Poster
 
Join Date: Mar 2000
Posts: 15,216
Originally Posted by Marambio View Post
I think you are confusing the current situation with hyperinflation periods of the past or the 2001/2002 crisis, and current events are very different from those periods.

Life these days is business as usual. Everyone is pricing in pesos, prices are not constantly changing, ATMs are working, credit cards are accepted (I actually bought a plane ticket in a European website with my Argentine credit card a few days ago, and had no issues at all), and there are no disruptions other than your typical daily Buenos Aires protests.

Prices will obviously rise in many items over the next weeks, as customary after a devaluation, but this is not Argentina in the late 1980s nor Venezuela, where they change daily.

I don't see why you shouldn't plan your upcoming trip. We are at the end of the "hot sale days" here and there were quite a few nice offers (in pesos) in plane tickets and hotels throughout the country. Maybe it's worth taking a look.
Thanks. Yes, I know this hasn't (yet?) reached the craziness of 2002, but the Argentine peso has declined about 20% against the dollar in a month! I'd be pleasantly surprised if my trip to Argentina would now be (almost) 20% cheaper. If this holds, I will be spending more time in Argentina and less time in, say, Chile (where their currency is a little weaker, but still quite strong). FWIW, on my last trip to Argentina, a few months ago, I found the Peso to be somewhat overvalued -- in the sense that many things seemed as expensive in Argentina as in the USA. That was 17 pesos to the dollar instead of today's 24 or 25. Which leads to one more question: are tbe "cambio" guys back, and what is their rate?
iahphx is offline  
Reply With Quote
Old May 16, 18, 12:41 pm
  #4  
 
Join Date: Mar 2005
Location: Buenos Aires
Programs: Flying Blue Silver
Posts: 405
This shouldn't reach the levels of 2002 by any standards simply because the situation is different -- in 2001/2002 the whole Argentine economy used US dollars and the Central Bank had run out of US dollars. Now the problem is that the government is financing its debt with credit, and since the US interest rates rose, credit became more expensive, and investors turned back to the USA instead of buying Argentine bonds. It's far from ideal, but it is not caothic -- yesterday the Central Bank sold new bonds and they were oversubscribed, and the peso seems to have stabilised. Besides, over 80% of bank loans these days are in pesos or in UVAs (an inflation-based index), whereas in the 1990s 100% of the loans were in dollars.

As discussed in another thread, the peso is (still) overvalued. With the USD at 18 pesos, having dinner at an average restaurant in Buenos Aires was the same in euros than having dinner at an average restaurant in Rome, and that is ridiculous. And the cost of living was also quite expensive in international standards -- a 2L bottle of mineral water is 26 pesos at the supermarket, around 1 dollar now, but almost 1.50 dollars a few months ago.

There are cambio guys but there is no "blue" rate anymore, so going illegal doesn't have many perks. According to El Cronista, the spread between the official rate and the paralelo is less than 5%.
Marambio is offline  
Reply With Quote
Old May 16, 18, 3:15 pm
  #5  
Suspended
 
Join Date: Jan 2000
Posts: 13,453
It does not have to be 2002, or 2013 or 1990, for the "Cambio guys" to come back, a "paralelo" of 10% is more than enough to bring them back in force.
hfly is offline  
Reply With Quote
Old May 16, 18, 3:53 pm
  #6  
FlyerTalk Evangelist
Original Poster
 
Join Date: Mar 2000
Posts: 15,216
Thanks for the update. For both locals and tourists, I hope the devaluation of the peso is orderly. All of us knew the peso was overvalued. I don't think it's a good thing for Argentina for the devaluation to occur so quickly. Hopefully, the process will be orderly. Given Argentina's history, I wouldn't necessarily count on that, but I'll remain hopeful.
iahphx is offline  
Reply With Quote
Old May 16, 18, 6:15 pm
  #7  
FlyerTalk Evangelist
 
Join Date: Jul 1999
Location: Over the Bay Bridge, CA
Programs: Jumbo mas
Posts: 28,742
Originally Posted by iahphx View Post
Thanks for the update. For both locals and tourists, I hope the devaluation of the peso is orderly. All of us knew the peso was overvalued. I don't think it's a good thing for Argentina for the devaluation to occur so quickly. Hopefully, the process will be orderly.
You are right. It is much better to use up every one of their last US Dollar reserves until a less orderly disastrous crash happens.
Eastbay1K is offline  
Reply With Quote
Old May 17, 18, 7:09 am
  #8  
 
Join Date: May 2018
Posts: 7
The truth of the matter is that the peso has been hold back by the government in an effort to reduce inflation. This has been done with foreign debt without a conscious reduction of government deficit. It seems that the worst is now over, but still, Argentina economy is very expensive.
I don't think we're going to see the same situation as in 2001/2002

Best Regards
dwaisman is offline  
Reply With Quote
Old May 17, 18, 7:14 am
  #9  
FlyerTalk Evangelist
 
Join Date: Aug 2006
Location: Argentina
Programs: BAEC Azul
Posts: 36,388
Inflation rate has roughly been the same every year of the eleven years I've lived here so it's nothing new.
Fortunately our income rises more or less in line with inflation so our lifestyle hasn't changed. If you were used to exchanging your dollars for pesos with some bloke up a back alley you may find holidaying here costlier but the more favourable official exchange rate should cancel out most of the costs.

It's Argentina...
malagajohn and dwaisman like this.
HIDDY is offline  
Reply With Quote
Old May 17, 18, 7:23 am
  #10  
 
Join Date: Sep 2017
Programs: Virgin Atlantic
Posts: 19
If you're paid in the US in dollars your view of Argentina's prices is partially subjective. Buenos Aires is a big city. The opulent parts of it are as expensive as a lot of other big cities.

If you look around you can find boutique hotels that deliver excellent service for reasonable prices in Recoleta. Shopping around for restaurants works too. Uber is also cheaper than the US.

That said, Buenos Aires is far too sophisticated to diminish to dollars and pesos. It's one of my favorite cities and I would pay much, much more to visit.
ri_us is offline  
Reply With Quote
Old May 18, 18, 6:20 am
  #11  
FlyerTalk Evangelist
Original Poster
 
Join Date: Mar 2000
Posts: 15,216
I found this story on the latest peso crisis to be interesting:

https://www.washingtontimes.com/news...tion-mauricio/
iahphx is offline  
Reply With Quote
Old May 18, 18, 12:01 pm
  #12  
FlyerTalk Evangelist
 
Join Date: Jul 1999
Location: Over the Bay Bridge, CA
Programs: Jumbo mas
Posts: 28,742
Originally Posted by iahphx View Post
I found this story on the latest peso crisis to be interesting:

https://www.washingtontimes.com/news...tion-mauricio/
Without getting too political in this thread, remember the source of the article. Note that quotes like this: " A 2001 government default was followed by 12 years of leftist rule that left Argentina struggling to rebuild its treasury and clean up its reputation in the global financial circle" are not particularly instructive, because it wasn't the "leftist rule," it was the incessantly-corrupt, bat$!* crazy rule. Note that neighbo(u)rs Chile and Uruguay have had predominantly "leftist" rule during years of stability and growth.
malagajohn and dwaisman like this.
Eastbay1K is offline  
Reply With Quote
Old May 18, 18, 2:04 pm
  #13  
FlyerTalk Evangelist
Original Poster
 
Join Date: Mar 2000
Posts: 15,216
Originally Posted by Eastbay1K View Post
Without getting too political in this thread, remember the source of the article. Note that quotes like this: " A 2001 government default was followed by 12 years of leftist rule that left Argentina struggling to rebuild its treasury and clean up its reputation in the global financial circle" are not particularly instructive, because it wasn't the "leftist rule," it was the incessantly-corrupt, bat$!* crazy rule. Note that neighbo(u)rs Chile and Uruguay have had predominantly "leftist" rule during years of stability and growth.
Argentina just always seems to be Argentina. Just when you think that MAYBE it will become a "normal" country, weird stuff happens again.

My next visit is supposed to be to Patagonia. Even in relatively "calm" times, weird stuff happens in Patagonia. Like there's no gas to buy (big problem if you're on a Patagonian road trip). This has now happened to me twice. You can probably understand my concern that, given that latest economic developments, I could run into some "problems." FWIW, I like Argentina a bit more than Chile but, for practical reasons, I tend to spend more time in Chile. Stuff "works" there, no matter who's in charge.
iahphx is offline  
Reply With Quote

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off


Thread Tools
Search this Thread