Archive | Living

Using Bitcoin to Get the Dolar Blue Rate in Argentina

One of our more frequent topics is on the “dolar blue” rate in Argentina. This is the unofficial rate at which the US dollar trades in Argentina. Yesterday it hit a new record high of U$S 1 = ARS $9.40. That’s an 81% difference to the official rate and a great reason never to use your credit card or ATM in Argentina.

There are a few ways to take advantage of the dolar blue rate that we have discussed before:

Bring US dollars and convert at the blue rate.
Pros: the best rate available
Cons: theft, counterfeit bills, finding a cueva to exchange, technically illegal
Use a money transfer service like Xoom or Azimo and get a rate close to the blue rate.
Pros: legal, transfer from your bank account overseas, relatively easy
Cons: not available in all countries, must physically pick up money, paperwork required, rate good but lower than blue rate

A new method has emerged as well using the relatively new digital currency, Bitcoin. Bitcoin is a decentralized currency and payment system that is not under any government control. Check out the video below for a more detailed overview (or check out this Bitcoin course for a much more in-depth explanation):

Ok, so now you know that you know what Bitcoin is, how can you use it in Argentina to get the blue rate?

Argentines are not very fond of holding pesos – especially with inflation estimated at 25% – 30% per year. And with government restrictions on purchasing foreign currency or gold, many Argentines see Bitcoin as an investment opportunity that is outside of the government’s control. Unfortunately, the currency controls also make it impossible for Argentines to purchase Bitcoins online with pesos. This is where the trading process comes in. You purchase Bitcoins and then trade them for physical pesos at the blue rate.

Watch this short documentary film, “Bitcoins in Argentina,” for a great overview of the process:

Ok, so now you’re ready to trade Bitcoins, right? There’s a few steps you’ll need to take:

1. Get some Bitcoins
In order to get Bitcoins, you need to set up an account and purchase them. We’ve found Coinbase to be a great site to do this. This may take several days to set up, so don’t wait for the last minute.

2. Find someone to trade with
There are a few methods for finding a trading partner in Argentina – the Bitcoin Argentina Mailing List, LocalBitcoins, Bitcoin Argentina on Facebook, and Bitcoin Meetup. The mailing list seems to be the most active, but LocalBitcoins is growing rapidly. Once you find a trading partner, agree on the rate, pick a spot to meet and trade away!

So, what are the pros and cons of using Bitcoin?
Pros: relatively easy to use, completely anonymous, high exchange rate, works for people from almost any country, no need to carry cash, no paperwork
Cons: relatively new currency with high level of price fluctuation, must find a trading partner, must meet in person for exchange, false bills

The biggest con in my mind is the high number of price fluctuations and crashes that Bitcoin has experienced, however I think this can be somewhat offset as the seller by buying and selling in the same day. The buyer holding the Bitcoins has a lot more exposure to these price fluctuations. As for finding a trustworthy trading partner, a lot of the resources above will let you see what other trading the person has done before, and be sure and count the money before sending your Bitcoins.

Are you ready to start trading? Let us know in the comments if you do and what your experiences have been.

- Thanks to this Reddit post for more info on Bitcoin in Argentina.

Send Money from the UK to Argentina

By DaVe McComb on in Living

Azimo is a new service that allows anyone from the United Kingdom to send money to Argentina - and get the blue rate!

We’ve previously written extensively about Xoom, but that only works for those with a US bank account. Well, now is the time for Brits to get in on the money-sending action too.

Azimo allows you to send money using any UK debit card, online or telephone banking, or by going into a Barclay’s bank if you’re in the UK. You can then pick up the money in Argentina from a wide range of locations (a lot more than Xoom offers) or send it directly to a bank account. Please note that while their site states that you can pick up US dollars or pesos, that is not correct. You can only get Argentine pesos.

So, what is the rate? Currently it’s an impressive £1 = ARS ~~$12.3811~~ $13.2142 with their standard £5 transfer fee. Compare this to the official rate of £1 = ARS $7.9074, and that’s an extra 53% on your money! There is currently a limit of £899.99 every 30 days, but that can be raised by providing proof of identity.

For a limited time, if you use the promotion code MONEY2013 when sending, you’ll get the transfer fee (£5) for free as well. (You may also try the codes: AZIMO2013 and DINHEIRO2013.)

Here’s a quick overview video of their incredibly simple process:

Go give Azimo a try now and let us know in the comments how it worked out for you.

(Please note that I earn a referral fee if you use my links above. It’s a great service and I appreciate the support!)

It’s Peanut Butter Jelly Time!

By DaVe McComb on in Food, Living

Many an expat’s lament about living in Argentina is missing the things from home. One of the things at the top of that list for American expats has been peanut butter. Check any expat forum or blog and you’ll undoubtedly see someone complaining about the lack of peanut butter in Argentina.

Well, tell them to stop their bitching. Peanut butter is here in a big way.

While there was always a way to find peanut butter in Barrio Chino or at one of the dietetica’s it often left much to be desired. The brands in Barrio Chino typically had tons of sugar added and the others were often a weird pasty substance. Now, there’s two real options for you:

Dame Mani has long been one of the biggest brand of Argentine peanut butter, but only recently did they add an all natural option. The new “maní untable natural” has absolutely no added ingredients. It is now available in pretty much every supermarket. A 510g jar goes for about $28 pesos. Unfortunately they only have a creamy option, so chunky lovers are out of luck with this one, but…

Our much preferred choice is the handmade peanut butter from Mil Mantecas. Recently opened, this expat business handcrafts each batch – creamy or crunchy – from only the finest ingredients. Each jar is 340g of what I like to consider fine, craft peanut butter.

The crunchy we had was without a doubt the best I’ve ever eaten. I actually had to look at the ingredients again to confirm that it did not have any added sugar. The combination of sweet and extra crunchy was just perfect.

Mil Mantecas hand delivers each order and prices start at $25 pesos for classic and $30 pesos for crunchy plus delivery. Discounts are available for larger orders. It’s a bit more than the store bought brands but for the freshness and quality, it can’t be beat.

Now that you’ve got your peanut butter fix handled, it’s time to go back to bitching about other things like broken sidewalks and dog crap.

Dolar Blue Hits Record Highs After New AFIP Rules

By DaVe McComb on in Living

The “dolar blue” has hit record highs for the past two days following new rules from AFIP (the Argentine tax agency) that imposed additional fees on the use of Argentine credit cards as well as on travel packages purchased in Argentina for travel outside the country.

First, AFIP raised the surcharge that Argentines must pay for using their credit cards abroad from 15% to 20%. This fee is applied to all purchase made in foreign currency, including Internet purchase. Then, they imposed a 20% tax on all travel purchases made in Argentina for travel abroad. This was designed to reduce the benefit of paying for your travel in pesos at the official rate while getting the blue market rate for your dollars (see example below). Argentine residents can get this 20% back when they file their tax returns.

Initially it was reported that non-residents would no longer be able to buy travel packages or airfare for travel abroad in Argentina, but it seems that this has been changed to allow them to buy the packages with the same 20% surcharge. Supposedly this is a tax that you can get back when you file your foreign tax returns as well, though it is unlikely that most people will do this.

The result of all the new AFIP regulations is that the dolar blue went crazy, jumping from ARS $8.06 on Monday, to ARS $8.25 on Tuesday and then to ARS $8.70 on Wednesday! This is an almost 8% jump in just 2 days – meaning the tax is really only 12%.

So, how does this all work? I think an example is best…

Let’s say you wanted to buy an airline ticket from Buenos Aires (EZE) to New York City (JFK). You go online and find that American Airlines is selling the ticket for U$S 1200. Now, you could buy that ticket on your non-Argentine credit card and you would pay U$S 1200. Simple.

The benefit comes into play when you buy that ticket with your Argentine credit card or pay in pesos at the American Airlines office in Buenos Aires. They would convert that U$S 1200 ticket to pesos at the official rate – ARS $5.10 * U$S 1200 = ARS $6120. Now, assuming you were getting the pesos you needed to pay 3this at the blue market rate (ARS $8.00) rather than the official rate, you’d be getting that same ticket for only U$S 765 (ARS $6120 / ARS $8.00). Supposedly this was being over-exploited by Uruguayans and Chileans who were coming to Argentina specifically to purchase travel. This is why AFIP imposed the new 20$ fee – to make this less attractive.

Yet, even with the new fee, buying that same ticket would be cheaper in Argentina than paying in dollars. Assume that U$S 1200 ticket has $100 in taxes (which you do not pay the 20% charge on), you’d now have to pay U$S 1420 for the ticket. That would be ARS $7242 at the official rate and U$S 875 at today’s blue market rate of ARS $8.27. That’s still a significant savings off the original U$S 1200 price.

So, what did this regulation actually do? Just made it more expensive for Argentines to travel. If you earn and spend in pesos, the dolar blue has relatively little meaning to you and all of this juts makes like more difficult…

Note: The Xoom rate is currently only at $7.53 as it usually takes them a few days to catch up to major blue market changes.