First modification:
The Argentine Government put into effect this Friday, October 4, 2022, an exchange incentive to encourage foreign tourists to make their expenses with a debit or credit card and thus increase foreign currency income, at a time when it needs to increase its monetary reserves.
Arriving in Argentina loaded with dollars in cash has been, for years, a common practice among tourists, eager to receive a better payment for the currency in the informal market, whose exchange rate is substantially higher than the official one. But the Government wants, if not to end it, at least reduce it.
From now on, the Central Bank will no longer force credit card companies to pay foreigners’ expenses at the official exchange rate, but rather through the financial market at a much more convenient exchange rate.
Argentines who pay with a card from abroad acquire the same benefit, the Executive clarified.
How does the new exchange rate work?
“Tourists consume with the card; the card converts this expense at the exchange rate set for tourists from abroad; tourists pay in dollars to the cards and the card companies sell those dollars in Argentina through the financial market and then pay businesses or services in pesos, ”explained the Government.
In practice, tourists who make any type of expense with a credit or debit card issued by a foreign bank will pay for their billed consumption at the rate of the so-called “MEP dollar”, which is quoted at around 290 pesos per unit.
Under the previous regime, they had to pay at an official exchange rate of 164 pesos. The Argentine peso is the most devalued in the region so far this year, down 34.8% against the US dollar.
A measure to accumulate dollars in a country short of foreign exchange
With the new system, the Central Bank hopes that tourists will avoid the inconvenience of traveling to Argentina with bills and the risks of going to the informal exchange market. But also accumulate more reserves in a time of scarcity.
According to official calculations, in 2019, before the outbreak of the pandemic and with a normal flow of tourists, between 200 million dollars and 250 million dollars per month entered Argentina, derived from the expenses of foreign tourists with cards.
That average is now about 30 million dollars a month, as Natalio Cosoy, a correspondent for France 24 in Buenos Aires, explains.
The Government calculates that, so far in 2023, foreign tourists have spent some 2.5 billion dollars in the country, of which only 15% entered the Central Bank’s reserves. According to official calculations, in the last two months of this year they can enter 1,100 million dollars through this route.
With EFE and local media
