Posts Tagged ‘exchange rate’

Over the past couple of weeks, the Chilean Peso has dropped from about 472:1 CLP/USD ratio, to nearly 505:1 as of the time of writing.

Bad news for those of us, like myself, who changed a big batch of dollars to pesos not terribly long ago. Good news for those, like myself, who continue to earn in dollars.


Buenos Aires, Argentina:

We’re here in BA to visit RomanianBob for his birthday (observed). Before the trip we put together our “Bourne File” with our various currencies, which we always tally up before an international trip. We have Paraguayan Guarani, Chilean Peso, Uruguayan Peso, Canadian Dollar, Brazilian Real, US Dollar, a couple of Euro notes, and Argentine Pesos from our last jaunt a couple of years ago. Basically the leftovers from our various wanderings. And some various 500 Trillion Zimbabwe Dollar notes which we like to leave in the tip jar as a joke and warning to the curious.

WifeBob is fascinated with the dynamics of the ongoing currency debacle in Argentina. How does good money push out the bad in a market so severely distorted? For example, the government rate is AR$4.71 per US dollar, but the black market rate is AR$6.20, you can negotiate anywhere from 5.5 to 6 if you pay in cash for something, and the automatic credit card exchange rate is like spinning a slot machine since you don’t know what you’ll get. In short: at the end of the day, you really don’t know what sort of value you are getting, because it’s such a mess.

This morning, 10 pesos for a few slices of cheese. So we pay in AR$. But it was change from a transaction last night in which we paid US$ for and got back AR$ in change, at a rate of about 5.5. So what did we pay? Who knows. Did we get a deal, or was it a ripoff? Who knows. Should we spend the worthless Pesos first, or should we spend the Dollars and get a better deal? Who knows.

So if we can’t even keep track over a 24 hour span, how are accountants, businesses, and international financiers supposed to know what the heck is going on with their true values?

Despite the lack of ability to determine value, things still seem normal in BA. Life goes on for the Argies, as they patiently wait for the collapse and renewal after Kristina & Friends recklessly drive the country over the cliff.

PayPal has had to close down domestic transactions for Argentine customers. Apparently the Argentinos were opening two accounts and using them to send money to themselves, in order to take advantage of a better Peso-Dollar exchange rate than is available from the Kirchner regime. Details here.

Meanwhile, as of writing, the government rate is 4.69 Pesos per Dollar, and the black market rate is 6.34, a difference of 35% (source: dolarblue)