Argentina’s Economy Ministry has eliminated restrictions on displaying prices in U.S. dollars, while the Central Bank announced that local debit cards will be able to make payments in both dollars and pesos. The twin announcements mark a shift towards the dollar sitting alongside the Argentine peso in the country’s economy.
On Friday, the Economy Ministry replaced a 2002 norm with a new resolution allowing businesses to display prices in dollars, at the same size as — or larger than — their peso equivalents. The 2002 resolution required any foreign-currency prices to be smaller than the value in pesos.
Although some businesses like realtors already display their prices solely in U.S. dollars, they were legally not allowed to do so.
Businesses that start displaying their prices in U.S. dollars can freely use the official, MEP, or informal “blue” exchange rates to convert them from pesos, a source in the Trade Secretariat told the Herald. The displayed price is the final amount the customer pays, irrespective of the rate used.
Friday’s resolution also requires businesses to show prices before VAT and taxes in smaller characters, irrespective of whether they are in two currencies, so that “the consumer knows how much tax they pay on each purchase,” a spokesperson for the Trade Secretariat told the Herald.
In its December 2023 mega-decree, the government already started allowing contracts to be made in any currency, “whether or not it is legal tender in the country.” Erstwhile Foreign Minister Diana Mondino quipped at the time that people could even sign contracts in “liters of milk” if they wanted.
The change is not expected to result in supermarkets nationwide immediately displaying prices in pesos and dollars, as happens in countries such as Venezuela and Cuba. A source close to the matter told the Herald that initially, it’s likely to be adopted by businesses such as travel agencies and domestic appliance stores.
Debit cards
The resolution was published one day after the Central Bank announced that payment service companies will develop infrastructure allowing debit cards to work in dollars and pesos. These will allow customers with local bank accounts to pay Argentine businesses in U.S. dollars, without the transaction going via the peso.
A source close to the matter told the Herald that the new system will not involve issuing everyone with new cards. To pay in dollars, account holders will simply need to link their existing cards to their dollar-denominated accounts.
When paying for goods priced in multiple currencies, they will choose the currency they want to use, and the money will be debited from their peso or dollar accounts accordingly.
The dual-currency payment system will work with debit cards and QR code payments — but only for Argentine banks, the Central Bank’s press release said. Foreign cards will still go via the peso at the foreign tourist dollar exchange rate. This consists of the MEP rate plus any fees applied by the cardholder’s bank.
Credit cards are not included in the measure, either. However, the Central Bank’s goal is to enable foreign-currency purchases in installments with local debit cards.
The companies have until February 28 to develop the dual-currency card system, and until April 1 to create the QR service.