Canada Markets closed

Peso Slump Turns Argentina Into a Bargain -- at Least for a Day

Laura Millan Lombrana
1 / 2

Peso Slump Turns Argentina Into a Bargain -- at Least for a Day

(Bloomberg) -- Surrounded by duty-free bags at the Puerto Iguazu airport in Argentina, Marcela Riquelme is reflecting on the fact that she may never time a holiday this well again.

The Chilean tourist had traveled to the Iguazu waterfall, a world heritage site, as a primary election in Argentina triggered a slump in the peso and made her holiday as much as a third cheaper overnight.

“I bought the tickets months ago, I set a budget for the trip and I saved some money,” Riquelme said. “When I got here things were a lot cheaper than I expected, so I just took advantage. It’s marvelous!”

The 31-year-old law student wasn’t the only one on a spending spree because of the cheap peso. Down the road, at the border crossing, a long line of cars was waiting patiently to get into Argentina from Brazil. None were going the other way.

Bargain-basement prices may not last long though -- just look at the menus in local restaurants. Prices were marked in pencil and the worn-down pages showed signs that numbers had been erased and re-written a few times in recent weeks. Argentina has had an average inflation of 50% for the past year.

It is just a question of days before those prices are re-written. The Argentine peso plummeted as much as 33% in the days following the victory of opposition candidate Alberto Fernandez over President Mauricio Macri in the Aug. 11 primaries. While the Peronist leader was expected to win, the margin caught the market by surprise.

It also surprised New Jersey residents Anton and Janet Becker, who had exchanged dollars into pesos when they landed in Buenos Aires a few days before the primary election. When the crisis hit the markets, their Argentine pesos were suddenly worth much less -- and their driver told them he preferred to be paid in dollars anyway.

“We were surprised by the drop,” Anton Becker said. “But overall, it’s been an excellent trip.”

To contact the reporter on this story: Laura Millan Lombrana in Santiago at lmillan4@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Philip Sanders, Carolina Millan

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.