Cash in Argentine pesos (ARS)
The Argentine peso (ARS) is one of the most vulnerable and unstable currencies among the world's major economies. The peso is frankly feverish even against its neighbours, such as the Brazilian real (BRL). And when combined with the multitude of simultaneous and almost equal exchange rates, it makes for an extremely interesting story.
The dramatic history of the Argentine currency
"Peso" is one of the oldest and most common names for a currency in history. It was initially the name of a Spanish coin of eight silver reals, which became the model for the currencies of almost all Latin American countries in the 19th century. And not only Latin America — "old" pesos and dollars differed only in minted symbols, and the weight of metal (and, accordingly, the value) they had the same. Traces of this kinship of dollar and peso can be seen today - the symbol $ denotes both dollars and pesos, including Argentinean ones.
The peso has been used in one form or another throughout virtually the entire history of independent Argentina. From 1826 to 1985, there were 6 "generations" of pesos, some in circulation simultaneously. Argentina lived without the peso only from 1985 to 1991. It was a desperate attempt to combat the hyperinflation of the 1980s, but it was unsuccessful.
The modern pesos were introduced in 1992. Initially, the exchange rate was pegged to the U.S. dollar at a ratio of 1 to 1, with each peso in circulation having to be backed by a dollar in the Argentine Central Bank's international reserves — just like modern-day stablecoins. For almost ten years, this scheme worked quite well.
However, since the financial crisis 2001, the peso has been steadily falling, confidently ignoring all attempts to stabilize it. The measures taken by the government led only to the development of the black market and the widening of the gap between the official and real exchange rates.
And now, the very existence of the peso in the near future looks ambiguous. The country's authorities are seriously discussing the scenario of complete abandonment of the national currency for the sake of transition to the U.S. dollar.
ARS currency rate
The exchange rate for Argentina is an extremely difficult and painful topic. And it is not even that the peso to dollar exchange rate can change significantly in just a couple of days (depreciation of the peso to the dollar twice in six months is the norm of life in the last decade).
The difficulties start with the question, "What exchange rate are we looking at?". There is even a joke in Argentina that their country has more dollar exchange rates than any other.
The official exchange rate since mid-August 2023 is fixed as 350 pesos per dollar. But in practice, this exchange rate is very little used, remaining only a populist measure adopted in preparation for the elections.
The real exchange rate of the black market currency, the dollar blue, is more than 800 pesos to the dollar. In addition, there are entirely official rates for local payments (dollar MFP), international payments (dollar CCL) and a "tourist" rate for processing payments from foreign banks' cards in the country. They differ slightly from each other and are somewhere 10-15% lower than dollar blue.
More specific rates are used for settlements in narrow industries; it makes no sense to describe them — there are simply too many of them, and the need arises only in very narrow groups of people.
ARS cash in circulation
Currently, banknotes are in circulation in denominations of 2, 5, 10, 20, 20, 50, 100, 200, 200, 500, 1000 and 2000 pesos. The last one has been in circulation since the beginning of 2023, and its appearance is dictated by high inflation. Introducing a 5,000 peso note is even being considered for the foreseeable future.
Banknotes of small denominations in practice in circulation are rare. The latest series of banknotes, issued from 2022, starts only with 100 pesos.
The peso consists of 100 centavos. Theoretically, there are coins of 1, 5, 10, 25, 50 centavos and 1 and 2 pesos in circulation. In practice, they are not in circulation, as their value tends to zero.
How to exchange currency for cash pesos?
The government's attempts to keep the exchange rate down have resulted in a developed black market for the currency and a real exchange rate, the so-called dólar blue. The difference between these rates is about two times the exchange rate.
What is unusual is that many banks recognise dólar blue and, when paying with foreign bank cards, debit funds in close accordance with the black market rate. To "save face", this rate is officially called the "tourist" rate.
Banks exchange cash at the official exchange rate, i.e. for your dollars, you will get half as many pesos as on the black market. Because of this, private exchange offices are in great demand.
It is also possible to make an appointment to exchange online. Such exchangers are often grouped by ethnicity or language. For example, Russian-speaking ones mainly work with natives of the former USSR. When exchanging a large amount of money, many exchangers are ready to organize the delivery of money by courier to the place specified by you.
On the other hand, the instability of the peso makes the idea of a one-time exchange of a large sum in dollars or other foreign currency a dubious solution unless you plan an urgent large purchase.
The role of cash
The penetration of non-cash payments into everyday life in Argentina is noticeably lower than in Europe or the United States. Although card payments have become popular, cash remains the dominant means of payment.
However, thanks to the government's policy of encouraging cashless payments, many large shops are willing to give a discount for card payments (about 10%). In restaurants, the situation is usually the opposite - you can get a discount when paying with cash.