This is a cash culture. Visa and MasterCard are powerless in the many businesses that accept payment sólo en efectivo. It's an appropriate name for cash, by far the most effective mode of purchase here.
A popular nickname for it is plata, which literally means silver. The term permeates both conversation and geography—Buenos Aires sits on the shore of the Río de la Plata, and the city of La Plata is the capital of Buenos Aires province. The word is so popular that the local term for avocado is palta, an anagram of plata, both words signifying things that are rich and partially green. I may have made up that last one, but it is true that Argentina itself was named after the Latin for silver (argentum), which is also the etymology of the element symbol for silver, and by extension, this domain name. Meta-trivia!
As a tourist, the importance of cash manifests itself immediately in the form of currency exchange. There is the official exchange rate, as set by the government, and the "blue market" rate, as set by the market. The difference between the two is drastic and volatile. Use a credit card or ATM and be rewarded with 8.4 pesos per US dollar. Bring physical dollars to an unofficial exchanger and get almost twice as much—recently, as high as 15.8 pesos. It sounds chaotic and semi-legal at best, but there are scores of websites publishing their estimates of the day's rates. Exchanges are done in mundane places, like newspaper stands or offices with waiting rooms.
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| Rooms like this, perhaps. |
In the past month alone, the dólar blue has risen by about two pesos. In the same time, the official rate has increased by less than one-tenth. The gap is only widening.
Why does the gap exist? The stack of freshly minted 100-peso notes we recently received serves as illustration. Literally, the government is printing more money. Simultaneously, the government is trying to deny inflation. The 100-peso note remains the highest denomination in circulation, despite being only enough to buy a couple coffees and a cab ride.
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| You're gonna need a bigger wallet. |
Inflation in Argentina is a persistent, massive topic. While my grandest aspiration is to make this the Last Week Tonight of travel writing, for now I am limiting my research to Wikipedia:
- The annual inflation rate is around 40%, though other sources state much higher figures and the government states much lower. Historically, Argentina has known worse. In 1989, in the month of July alone, they experienced a 200% increase in prices. Annual inflation in the U.S. is currently less than 2%.
- Argentina has introduced many versions of the peso, each replacing the former by varying degrees of magnitude. For example, the peso argentino replaced the peso ley at the rate of 1 peso argentino = 10,000 pesos ley, effectively dropping four zeroes. Since 1969, thirteen zeroes have been dropped, a factor of ten trillion.
- As late as 2001, 100 pesos were worth $100 US. Only thirteen years later, the largest Argentinian denomination is worth $6–$12 US, depending on your exchange rate.
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| He's seen things. |
Cash is king, but in Argentina he is a fickle one.