Rule #1 in Argentina: Do NOT Talk About The “Blue Dollar”

By Bianca Fernet, Buenos Aires

This week the black/blue/unofficial ARS/USD rate hit 10/1 again. Remember the Messi dollar? I wish I could forget. Anyway, it appears to be here to stay for a while.

So what do you need to know to stay in the club with this new peso/dollar tomfoolery? A few things.

As per usual, the Federal Police, the Prefecture, the Border Patrol, and representatives of the Central Bank are loudly stomping around downtown in official-looking jackets, shutting down currency exchange operations and being as obvious as possible.

This is the typical first response when the blue rate jumps up, so the market’s reaction has been very minimal. Cambios have been effectively closed down since Thursday but to no avail – the peso has resisted the pressure and is stuck at 10. So if you’re trying to change your dollars today and are having a hard time, just relax and send a few messages around. You’ll get it done, but will have to be a bit sneakier than usual.


Last time the blue rate hit the 10 ARS/USD mark, the Government confronted the situation by inventing a financial instrument that allowed Argentines to bring undeclared dollars into the market without penalty. It was called the Cedin, potentially the most poorly thought-out financial instruments of the modern era. The Economist called it “a quasi-currency issued in exchange for the voluntary handing over of unofficially held dollar savings [that] is valid for property transactions.” To acquire a Cedin, you must hand over hard-hoarded, hard-hidden dollars and then convince the seller of the pad of your dreams to accept Argentine-government issued certificates that they promise to redeem for dollars. So it’s shocking that the Cedin was an unequivocal failure.

This time, there is speculation that Argentina will pursue a head-in-sand approach popular among ostriches worldwide and prohibit the reporting of the parallel rate. The October 27 midterm elections will determine how much support President Cristina Fernández de Kirchner retains from the Legislative Branch. Regardless of the outcome, there is speculation that next week will bring prohibitions on the publication of the unofficial rate and increased restrictions on the use of credit cards abroad and access to foreign currency.

Both the president of the Comisión Nacional de Valores (CNV) and senator Raul Fernández likened the publication of the price of the blue dollar to publishing the price of cocaine.

To this end, I’d like to state that it’s not against the law to study the price of cocaine, or even to publish studies on the price of cocaine. It is illegal to buy and to sell cocaine. I’m willing to wager that if a cocaine wave ripped through a major city that its price would be part of reporting.

Venezuela prohibited the publication of unofficial exchange rates seven years ago, and guess what – they are still home to a thriving currency black market that trades at over seven times the official rate.

If the government attempts to intervene by prohibiting newspapers and other organizations from publishing the reality, it will simply look ineffective and render news organizations incapable of performing their job of informing the public.

Selling and buying dollars at the unofficial rate is already against the law – prohibiting people from talking about it won’t change a thing. After all – not talking about Fight Club does not mean there is no Fight Club. By Bianca Fernet

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