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Thursday, May 10, 2012

Currency Exchange Buenos Aires The Informal Dolar

10:06 AM Unknown
    Getting your hands on the almighty U$S Dollar in Buenos Aires is fast becoming a game of whispers trust and and meetings in tiny offices where the money is counted quickly, handshakes are exchanged and the deal is done. No names are asked and any conversation is minimal.
   The reason behind this is that the Goverment in order to stem capital flight has made it almost impossible for Argentines to buy the Dollar legally at todays rate of $4.53 pesos (2nd July 2012) to the Dolar. Hence the Argentines are seeking out the black market and paying over $5.93 pesos each for Dollars. Why would they do that you ask? Simply because inflation in the pesos is out of the bag and there is no earthly point in holding a currency that devalues at approx 20% per annum.
    The knock on effect of the dollars drying up has been to stall what was a vibrant housing market and bring new starts in building projects to a grinding halt. With asking prices coming down by 10% and more and the potential buyers still not showing an interest. The fact is that just holding onto the Dollars now looks safer than the property market.
    Import restrictions have sent locally produced goods through the roof, as the local producers are always quick to exploit a captive market. And the removal of the opposition means Xmas has come early.
  In short Argentina needs to deal with the inflation or it will continue killing off one bussiness sector after another.
   The latest sector to find itself struggling is Hotels, As with fixed costs rising at 20% per year (minimum). They cannot pass this on to the tourists and any sudden down turn leaves them very exposed to high fixed outgoings and very low tourists numbers.
   Only a few years ago Argentina had more than 200 hotels either in construction or about to break ground. Now it has many hotels on the brink of going bust and not much sign of a light at the end of the tunnel.
   Many tourists are findings the furnished apartment rental market to be a much cheaper option with companys such as offering over 260 different furnished  apartments to suit all budgets and in all the major barrios of Buenos Aires. As apartments don't have staff costs as such they have managed to fend off the ravages of inflation and have become a bastion of good value in troubled times.
   Remember as the tourist coming in ,You have the stronger currency and therefore the advantage in all most all negotiations, You should try to use this to your advantage.
Buenos Aires is a fantastic city and there is still great value to be found, and you can still eat the best beef and drink great red wines at very reasonable prices.


1 comment:

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