Argentina bets that new exchange rate will boost tourism from neighboring countries
In addition to improving the conditions for payment with credit and debit cards, the scheme boosts the central bank’s reserves, by taking dollars out of the informal system.
The Minister of Tourism and Sports of Argentina, Matías Lammens, assures that the economic activity that generated the most jobs during the first half of the year was tourism. “This was the sector that grew the most, we saw an increase of 45% in July compared to the same month of 2021,” he told DF during his visit to Chile last week.
Read also: Check out our coverage on Argentina
The reactivation of this item is accompanied by a new exchange rate for foreign tourists that came into force on November 4. This will only work when people use their credit and debit cards for purchases made within the country.
“Sporting events have a great economic impact in terms of tourism, gastronomy, hotels, basically the entire local economy, so I think (hosting the 2030 World Cup) would be a great opportunity for us.”
According to Lammens, the new exchange rate is a benefit for tourists, since it allows them to pay less than before for the products they buy with cards. For reference, the value of the new dollar is trading at almost twice the official Argentine exchange rate, he explains.
SECURITY AND RESERVATIONS
Lammens emphasizes that in the past tourists had to keep cash for their expenses, which they exchanged informally on the streets, but this measure made it easier to use cards, which in turn increases the security of those who visit the country.
But the use of plastics does not have benefits only for tourists. “In internal terms, it also strengthens the central bank’s reserves, because with this new system, every dollar that tourists leave goes into the bank and not into the informal circuit,” he says.
The issuing institute of the trans-Andean country daily injects thousands of dollars into the market to try to contain fluctuations in the exchange rate, in the midst of an economic crisis that has dragged on for years. The international reserves of the central bank went from US$77.482 billion on April 9, 2019, to US$37.826 billion on November 9, 2022.
In the tourism sector, the challenge for the Argentine authorities is to recover the 7 million people who visited the country in 2019, since this sector represents one of the largest sources of foreign exchange and generator of employment. At the moment, the minister says that “they have been with good levels of recovery of visitors” from neighboring nations.
In the case of Uruguayan tourists, income has increased by 130% compared to pre-pandemic levels. With Brazil, the recovery has also been important, but the slowest flow has come from Chilean tourists. It was only in October that a jump was experienced that brought the recovery to 80%.
The bet of the Minister of Tourism and Sports is that with this new exchange rate “there is a matter of timing that makes Argentina have a total boom of tourists from neighboring countries in the coming months.”
WORLD CUP 2030 IN SIGHT
Months after FIFA decides which will be the official venue for the 2030 World Cup, Argentina, along with Uruguay, Paraguay and Chile, are running to be chosen. “It is a project that we have been working on a lot between the four countries. Different governments of different political cycles have passed and we all continue to have the vocation to work on it,” he comments.
Last Friday at the National Stadium the definitive consortium between the four countries was signed. Thus, the Together 2030 Corporation was created, which is made up of the four ministers of the Sports area of each of the nations.
From this milestone, the countries will have to start working on a concrete plan that will be delivered to FIFA. In it they will have to emphasize how the World Cup would unfold and how many venues each country will have, among other aspects.
Organizing an event of such magnitude implies that the host countries will have to invest in infrastructure and connectivity, but Lammens says that there are different multilateral organizations that want to help with financing. Although the States will also have to provide fiscal resources, the economic impact generated by a World Cup is “pretty good,” he says.
“Sporting events have a great economic impact in terms of tourism, gastronomy, hotels, basically the entire local economy, so I think it would be a great opportunity for us,” he says.
In addition, in 2030 it will be 100 years since the first World Cup was played in history. This took place in 1930 in Uruguay. The final was between this country and Argentina, so the minister believes that the decision must go beyond the material and the advantages that takes out the competition, since holding this event in the area has to do with tradition and history.
“We have a lot of confidence and hope that we will be the chosen ones, we hope that it will be so.”
With information from DF
More: Argentina news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error