The government will allow foreign tourists to transfer dollars into a local account and exchange them to pesos at a more lucrative parallel exchange rate, bypassing capital controls in a bid to lure travellers.
Tourists travelling to Argentina from abroad can open a temporary bank account before their trip and transfer up to US$5,000 into the country, the Central Bank announced Thursday.
The account can be opened online or via an app from abroad with a passport as identification. Upon landing in Argentina, travellers can get a debit card to withdraw pesos from an ATM or use the card for purchases, according to the statement.
Tourists will also be able to choose to exchange the dollars for pesos at a rate known in Spanish as the “MEP dollar” (Medio Electrónico de Pagos), used for bond transactions in Argentina, according to a Central Bank official who asked not to be named since that detail wasn’t in the formal statement.
The measure aims to get travellers to enter dollars through official channels rather than turn to black markets, where the peso trades at almost double the spot peso, which is tightly managed through capital controls. The spot peso closed at 99.69 per dollar Thursday, while the ‘MEP dollar,’ derived from transactions on bonds that trade both in pesos and dollars traded at 181.7 pesos per dollar.
The black-market peso, which can be obtained via illegal money-changers, trades at about 197 per dollar, according to local media.
The cumbersome move outlines how much the government needs hard currency to shore up the peso with inflation above 50 percent, net foreign reserves estimated to be negative, and large debt payments to the International Monetary Fund coming up. It’s also the latest measure to boost the country’s suffering tourism industry after the pandemic.
by Patrick Gillespie, Bloomberg