Big-Headed Benjamin

In the 1990’s, the Argentine Peso was pegged to the US dollar, one-to-one. But, after the country’s disastrous financial crisis in 2001, it was no longer pegged to the dollar and the peso began a hard downward slide as the government printed more and more money. At today’s official rate, one USD will buy you 154 pesos.

Because of the rapid devaluation of the peso, locals prefer to save foreign currency because the peso loses significant value sitting in the bank. This creates a huge demand for foreign currency as locals cannot purchase a significant amount of it through official channels. This has created a thriving underground market where USD can be exchanged at a much higher rate. For some reason, this is known as the “Blue Dollar Rate”. Today, October 21 for example, the Blue Dollar rate is 287 to 1, almost double the official bank rate.

Cash is king here as credit cards are billed at the official rate and, in many cases, are not accepted in smaller businesses due to the high service fees charged. Although the underground, or black-market exchange idea sounds a little shady, it is very much out in the open. It seems each city has a street that contains underground exchange houses where barkers stand outside offering “cambio”, which means change in English. Our Airbnb hostess exchanged $300 USD for us with her trusted blue-dollar dealer, but we may run low as we near the end of our trip. We’ll likely have to go ourselves and try to negotiate a favorable rate when that time comes.

One peculiarity of using the Blue Dollar exchange houses is that they offer the highest rate for “Big-Headed Benjamins”, US $100 bills printed after 1993 where Ben’s head pretty much fills the entire height of the bill. Someone started an unfounded rumour that the older bills would soon be retired and become worthless. Apparently, no amount of reassurance that there is no truth to the rumour will convince the dealers otherwise.

Thankfully, before we left home, Brenda did her research and learned about this financial quirk and, as a result, our money here is going almost twice as far. One more reason why I love her so much.Read more