Dollar difficulties and peso problems

I thought I might take a break from the gay marriage news to share a bit about the reporting life so far. The truth is, virtually all I saw of Buenos Aires our first week was the inside of banks, change houses, and my computer screen, where I’ve been writing notes that alternate from contrite to furious to our Argentinian landlord.

I could have had a much more interesting itinerary over the past couple days if the landlord had just told us he wanted payment in US dollars in one of the many emails we exchanged before our arrival. I assumed we were booking the apartment the same way we booked our hotel in Brazil—the price was quoted in dollars, but payment would be made in local currency. We haven’t been traveling with any cash, instead relying on ATMs. But when we arrived at 2 AM on Sunday morning, our landlord told us he wanted cash in dollars.

I’ve spent the week learning why dollars are so precious here—and fearing we were going to get evicted.

Though it’s been 10 years since Argentina’s big financial crisis, the peso is still unstable. Inflation is a serious problem, so the government bars citizens from buying foreign currency. And it has fixed the exchange rate at 4.5 pesos to the dollar, when the true rate is closer to six to one.

Admittedly, this is a problem we’re lucky to have: while we’re squeezed here, we’re fortunate to have a currency that’s (relatively) stable and strong. But last week, our healthy currency felt like more a curse than a blessing.

The impact of this is obvious in the prices for everyday goods. Buenos Aires has a reputation for being cheap, but common things are more expensive than they are at home when you convert them at the official exchange rate. A cup of coffee can be 25 pesos, or almost six dollars. It’s hard to get lunch for less than 40, almost ten dollars a person.

Early last week, I took the bus to downtown and paid a visit to several banks with branches on the grid of packed pedestrian streets. Every ATM I went to taunted me by asking me if I wanted dollars, only to deny me when I selected “Yes.”

When I went into the bank to see if there was another way to the withdraw the money, one place after another told me no.

Finally I got bumped to the special office above the Citibank branch. A very nice man in a suit explained to me that, because of new rules instituted this summer, there’s no way to get US dollars in the “formal sector.” He said I could try taking pesos to a moneychanger and hoping my passport would allow me to purchase dollars, but even that was unlikely.

He was right—the moneychanger told me that the only legal way to buy dollars was to use pesos I had purchased initially with cash, and I needed a receipt for the transaction.

My only option would be to go to a black market moneychanger, where I would have to pay the six-to-one exchange rate using pesos I’d taken out of the ATM at 4.5 to one.

I was getting desperate. I didn’t want to run the risk of getting counterfeit cash from a black market moneychanger. Our landlord finally said that he’d accept payment in pesos, but only if we paid at the unofficial exchange rate, effectively adding 200 dollars to our rent. He demanded payment that afternoon.

Then I got a tip: there’s an online service called Xoom; that somehow sells pesos at the market exchange rate, not the official one. It’s perfectly legit, as far as I can tell from internet research. You essentially wire yourself the money, pick it up at the equivalent of a Western Union office, and you’ve saved yourself a ton from the rate you’d get from an ATM.

I was nervous about sending a large sum of cash through a service I’d never heard of, but we were out of options if we wanted to keep this leg of the trip affordable. The next morning I went to pick it up, showed them my passport, and after asking a few questions to confirm my identity (including whether I had a personal website) they gave me the money. The only hard part was the anxiety of carrying that much cash on the bus ride home.

The whole experience has reminded me that we in the United States live with comforts that we don’t even realize are comforts—a stable currency, easy access to cash, multiple options for simply transferring funds among them. (These are actually some of the smaller ones when compared to having drinkable tap water and vegetables you can eat without washing them in bleach.)

I confess that before we resolved this part of me just wanted to go home. Not because I missed my neighborhood ATM, but because this hassle—and a couple other small scams I’d had pulled on me since arriving—had completely jaundiced my view of the city. And the gray weather hasn’t helped; it’s winter here on the earth’s underbelly.

But then the sky cleared; that night we went to see music with our one friend in Buenos Aires; and we have a new chance to experience the city without our cashflow problems hanging over our heads. And I have an even keener unstinting view of why it feels good to have cash in your pockets.

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