There are certain moments in history that scar a country forever; they leave deep wounds and change societal habits and attitudes all together. The 2001 economic crisis in Argentina, also known as “El Corralito”, is one of these events. El Corralito is the diminutive of “el corral” and means a small animal pen, a small enclosure, or a children’s play pin, all of which show the severe limitations that this government measure put on the people.
A brief history: Around 2001 the Argentine peso was losing value and in fear of losing more, Argentines started to pull their money from banks in large quantities and convert it to a more stable currency, like the US dollar. Eventually the government froze all bank accounts and only allowed those who were seeking pesos to get funds, in small quantities of course. The greatest blow (golpe) to the people was that the government converted funds/accounts in US dollars to Argentine pesos at a 1 to 1 rate, where the AR peso was really valued at 4 pesos to $1 US dollar. In other words, if you had $4,000 US dollars before El Corralito, the money was worth 16,000 pesos, but afterwards, $4,000 dollars was worth 4,000 pesos instead…
Argentina is a country with an average annual inflation somewhere between 25% and 30%, although the government will tell you otherwise. The country also has a habit of printing money, which only in turn lowers its value. In the last few months, the government has halted the purchase (or conversion) of AR pesos to US dollars all together, which has consequently increased not only the demand for dollars but also the value of the US dollar, on the black market. Today there are several dollars in fact, which really means several exchange rates—depending on what you are trying to do—but ironically a dollar being sold on the black market isn’t called the “Black Dollar” and is instead called the “Blue Dollar”, or el Dólar Blue.
Why blue and not black? To make it not sound so bad, really. The dollars have their own language, what I call the Dollar Language.
As of today, the 29th of August, the exchanges of different dollars are as follows:
- Dólar Oficial (aka: Official Exchange) – 4.65 pesos to $1USD
- Dólar Light Blue (aka: Real Estate Dollar)* – 5.51 pesos to $1USD
- Dólar Blue (aka: Black Market/Informal/Parallel) – 6.37 pesos to $1USD
- Dólar Green (aka: Arbolitos – little trees)* – 6.57 pesos to $1USD
*The Light Blue Dollar is the rate between the official and the black market dollar used for anything related to real estate. It is also known as “Dólar Inmobiliaria” or “Dólar Building.” The Green Dollar, or Arbolito (small tree), is the rate people selling and buying on the streets use, commonly in high tourist areas.
What has caused these different rates and where does the beloved and sought-after “Dólar Blue” rate come from? Scarcity of anything drives up the price. Although many things are different and better than they were in 2001, for anyone living here we hope this isn’t a case of history repeating itself. For now most people I talk to are just waiting to see what happens, following the rates everyday, and hoping no one is too blue later…