Desperate for dollars, Argentina just gave digital nomads another advantage over locals

Last December, Emely Lissette Mercado, a Los Angeles-area native working remotely for a U.S. payroll startup, decided to move to Buenos Aires. For around $1,000 a month — less than half the average monthly rent of a one-bedroom apartment in LA — she was able to rent a furnished studio in the hip Palermo district, take taxis or Ubers everywhere, and eat out every day. 

For those earning in dollars, the cheaper, more comfortable lifestyle possible in Argentina after the peso’s depreciation has been the allure for years. Recently, nomads like Mercado have been handed an additional advantage over locals: As international bank account holders, they’re now able to access a better conversion rate while changing U.S. dollars into Argentine pesos, using what the government has termed the “foreign tourist dollar.”

Argentines are not offered such generous terms. Locals get around 250,000 Argentine pesos for every $1,000, while international bank account holders get over double — 500,100 pesos. To get anywhere close to the tourists’ rates, locals need to find dollars on the black market — something foreigners paying with an international card can now avoid altogether.

“It’s hard for me to understand these types of currency policies when a large part of Argentina’s inhabitants are facing so many difficulties,” federal employee Carolina Costa told Rest of World, speaking under a pseudonym because she feared her opinion would compromise her job. “We’ve already seen how the influx of digital nomads has completely changed the prices with which we have to live.”

Mariana Luzzi, a sociology professor and research economist at CONICET, a state-funded research council, told Rest of World Argentina depends on U.S. dollars to pay for imports and to keep up with interest payments on its foreign debt. Its current monetary policies aim to keep as many dollars within its borders as possible, by incentivizing people to spend them locally and making it harder to buy dollars with Argentine pesos. 

Until last November, foreigners had to comply with the same currency exchange restrictions as locals. Then, the Central Bank decided to implement the foreign tourist dollar, a decision that came at the height of Argentina’s popularity as a destination for foreign tech workers. Experts and officials close to the policy change told Rest of World the foreign tourist dollar was instituted to capitalize on those who had previously visited Argentina but not used the government’s pre-approved channels to spend their dollars, often opting instead for the black market dollar exchanges Argentines still have to use. 

This was a disincentive for many nomads, who were unsure of how to navigate a foreign exchange black market. Before the new payments policy, said Mercado, the challenge for nomads was learning how to handle the exchange, especially because Western Union — previously the only other way to get dollars legally in Argentina as a foreigner — often runs out of cash.

The new policy is yet another incentive for tech workers to choose Argentina as their destination. About 6400 of them arrive each month, and Buenos Aires has consistently been on the top 10 list of digital nomad destinations compiled by Nomad List, an online resource for the community. Meanwhile, local Argentines told Rest of World they saw no benefit for themselves from the changed policy, only a broadening of the preexisting purchasing power gap between them and the nomads.

Sabrina, a 33-year-old tech worker from New York City, told Rest of World she’d chosen to work from Buenos Aires over Rio de Janeiro because it was so affordable for someone who earned in dollars. Speaking under a pseudonym because her company didn’t know she had surpassed her annual remote work quota, Sabrina said she arrived three months before the foreign tourist dollar came into force. She said she had to get used to bringing tote bags to Western Union when she went to exchange her dollars for piles of pesos.

“Using my credit card is much more convenient,” Mercado told Rest of World. She said she’s less mindful about her spending because she doesn’t need to worry about the hassle of procuring and exchanging dollars. Mercado was conscious, however, of her and her fellow nomads’ privilege compared to the locals. “As an expat, I know we’re living two different lives,” she said. 

It is a gap that the foreign tourist dollar has only widened, and which does not seem to have benefited local businesses catering to card-using digital nomads. Agustín D’Elio has managed La Huerta, a coworking space in Palermo, since 2018. He told Rest of World that though he’d seen an increase in foreign clients over the past year, the foreign tourist dollar policy was actually setting him back. 

The main reason, D’Elio said, was that customers now mostly paid with international debit and credit cards. When foreigners use their cards, it’s the Argentine government that keeps the dollars, with his bank depositing the money in his local peso account. To make matters worse, it takes “some 20 to 30 days before we actually get the deposit [in pesos]. With this inflation, that’s very inconvenient,” he said.

For locals, the foreign tourist dollar policy is a Catch-22 situation. There are so few dollars that the government is forced to incentivize foreign consumption locally — given their longer stays and disposable income, digital nomads form a key demographic. “The alternative to not getting more dollars into the country to pay for the debt would be to further devalue the peso,” Luzzi, the economist, said. “This would, in turn, make things even more expensive for locals.”