Argentina Introduces New Exchange Rates to the Mix — While Argentina has used dollar exchange controls for some time, the government is now establishing even more sorts of rates for various purposes, making it more expensive for Argentines to obtain specific services or goods. Due to their functionality and applications, the government has adopted two new currency rates this time, generally known as the “Qatar dollar” and “Coldplay dollar.”
The Qatar dollar rate will be applied to credit card purchases of luxury goods and services above $300 made outside or within the country. The denomination is linked to the use of this exchange rate by many Argentines to purchase airline tickets and hotel rooms for the 2019 Soccer World Cup, which will be held in Qatar.
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According to Despegar, an Argentine online travel agency, this denomination encompasses a series of taxes that are already deterring national and international tourism. According to the company: “Recently announced measures further discourage Argentines from traveling due to high tax burdens. Added to the constant changes in rules, which continue to affect tourism, this new measure makes it more difficult for an industry that has not yet recovered from the enormous crisis of recent years.”
The Coldplay dollar, the second new denomination, is a new exchange rate that will be used to international bands performing events in the country. Previously, organizations sponsoring such events had access to dollars at the official rate, which was the smallest denomination offered by the government. This exchange rate is named after Coldplay, a pop-alternative rock band that has already sold out ten concerts in the country.
For any event featuring an overseas musician, such as Coldplay, organizers will now be required to pay a 30% tax over the official dollar exchange rate. This will also have an impact on customers’ wallets, since they will have to pay extra to attend these concerts. With the additional denominations, the dollar now has more than 14 exchange values depending on its function.
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This contradicts Kristalina Georgieva’s, the International Monetary Fund’s managing director’s, advice. When reviewing Argentina’s second extended fund facility, she stated: “While targeted FX measures can temporarily support the balance of payments, they are not a substitute for sound macroeconomic policy. As such, exchange restrictions and multiple currency practices should be unwound as conditions permit and reserve coverage strengthens.”
