What Is the Argentine Peso and Why Does It Matter in Argentina's Economy

The ARS（Argentine Peso）serves as Argentina’s official currency and shapes the country’s economy every day. People use it for shopping, travel, and saving. High inflation, changing interest rates, and shifting exchange rates affect what citizens and visitors can buy. For example, in May 2025, inflation reached 43.5% and the peso’s value changed quickly against the dollar. Understanding the peso helps everyone make better choices with their money.

Highlights

• The Argentine Peso (ARS) is Argentina’s official currency and affects daily life, trade, and savings.

• Argentina has faced high inflation and currency changes, making the peso lose value many times.

• People often use both pesos and US dollars to protect their money during economic instability.

• Government policies try to control inflation and exchange rates but challenges remain.

• Understanding the peso helps people make smarter financial choices in Argentina’s changing economy.

ARS (Argentine Peso) Basics

Definition and Symbol

The ARS（Argentine Peso）serves as the official currency of Argentina. People recognize it by the dollar sign ($), but in international finance, it appears as ARS. The peso divides into 100 centavos. Since 1992, the country has used the current version, called the peso convertible. At first, one peso equaled one US dollar. This fixed exchange rate ended in 2001, and the value of the peso dropped quickly. Coins come in values of 1, 2, 5, and 10 pesos, and people use banknotes from 1 peso up to 1,000 pesos. Inflation has made the peso lose value over time. For example, inflation reached about 24% in 2017 and nearly 40% in 2020. The ARS（Argentine Peso）remains a key part of daily life, even as its value changes.

Official Status

Argentina’s laws and regulations give the ARS（Argentine Peso）its official status. The government and central bank set rules for how people use and exchange the currency. The following table lists important documents and their roles in the peso’s legal framework:

History and Instability

Currency Reforms

Argentina has changed its currency several times in the past fifty years. Each reform aimed to control inflation and restore trust in money. The country introduced the Peso Ley in 1970, replacing the old peso at a rate of 100 to 1. In 1983, the Argentine Peso replaced the Peso Ley at a rate of 10,000 to 1. Two years later, the Austral took over, again due to high inflation. By 1992, the government launched the current ARS（Argentine Peso）. This new peso replaced the Austral at a rate of 10,000 to 1 and started as the "peso convertible," pegged one-to-one with the US dollar.

During the late 1980s, Argentina faced hyperinflation. Prices rose so fast that money lost value almost overnight. In 1989 and 1990, inflation reached about 2,600% per year. The government responded with the Convertibility Plan in 1991. This plan fixed the exchange rate at one peso per US dollar and set up a currency board. The goal was to stop inflation and bring stability. The reforms also included changes in trade, taxes, and banking. These steps led to the introduction of the current peso in 1992.

Inflation and Devaluation

Inflation has shaped Argentina’s economy for decades. When prices rise quickly, people lose confidence in the currency. The ARS（Argentine Peso）has lost value many times because of inflation and devaluation. In 2001, the government ended the fixed exchange rate. The peso’s value dropped sharply. Argentina defaulted on $95 billion in debt, the largest default in its history. This crisis led to years of economic hardship and made it hard for the country to borrow money from other nations.

In 2023, inflation soared above 140% before the national election. The government allowed the peso to lose value against the dollar. National debt climbed to over $400 billion, more than 80% of the country’s total economic output. The budget deficit reached up to 10% of GDP, according to the International Monetary Fund. These events made daily life more expensive and savings less secure. People often turned to the US dollar to protect their money.

Economic Impact

Trade and Policy

The ARS（Argentine Peso）plays a major role in Argentina’s trade and economic policy. When the peso loses value quickly, it makes imports more expensive. Exporters may benefit because their goods become cheaper for buyers in other countries. However, large swings in the exchange rate can create uncertainty for businesses. In late 2023, the gap between the official and parallel exchange rates reached 158%. This gap made it hard for companies to plan and set prices. By September 2024, the government reduced this gap to 27% through new fiscal and monetary policies.

Argentina’s leaders use different tools to manage the economy. They adjust interest rates, control how much money is in the system, and set rules for buying foreign currency. The table below shows some key economic indicators that reflect these changes:

Purchasing Power

People in Argentina feel the effects of peso instability every day. When inflation rises, the money in their pockets buys less. In 2023, prices increased so fast that families struggled to keep up. Many people tried to save in US dollars to protect their money. The ARS（Argentine Peso）lost value, and wages often did not rise as quickly as prices.

Banks and the government took steps to help. Since April 2024, credit demand grew by 10% each month, and deposits increased by 2%. These changes suggest that people started to trust the banking system more. Still, many families watch prices closely and make careful choices about spending. The peso’s value affects what they can buy, how much they can save, and their overall quality of life.

Daily Life and Currency Use

Dual Currency Regime

In Argentina, people use both the ARS（Argentine Peso）and the US dollar in daily life. Many stores, landlords, and car dealers set prices in dollars, especially for big purchases like real estate or vehicles. A study found that over 70% of real estate prices in Argentina are listed in US dollars. This makes Argentina one of the top countries in Latin America for using dollars in property deals. People often save money in dollars because they trust it more than the peso during times of high inflation. Bank deposits and loans also show a strong link to the dollar, with about 64% to 66% of financial activity tied to dollar values. This dual system helps people protect their savings, but it can make everyday transactions more complicated.

Exchange and Controls

Argentina has several exchange rates and strict rules for buying and using dollars. The Central Bank sets the official exchange rate, which was ARS $1065 per US dollar in late 2024. However, people often pay more on the informal market, where the "blue dollar" rate can go above ARS $1400 per dollar. The government limits how many dollars a person can buy each month, usually up to $200. Extra taxes, sometimes as high as 60%, apply when people buy dollars for savings or use credit cards abroad. These rules aim to protect the country’s dollar reserves, but they also make it harder for families and businesses to get dollars when needed.

Argentina’s currency shapes every part of economic and social life. People face high inflation, changing exchange rates, and rising poverty. The table below shows how these factors affect daily living:

Staying informed about the peso helps people make better choices and understand the country’s challenges.

FAQ

What is the main reason for Argentina’s high inflation?

Argentina’s high inflation comes from printing too much money and losing trust in the peso. Prices rise quickly when people expect money to lose value. The government often prints more pesos to pay debts, which makes inflation worse.

Can visitors use US dollars in Argentina?

Many shops and hotels accept US dollars, especially in big cities. Some places prefer pesos for small purchases. Visitors should check the exchange rate before paying.

Why do Argentines save money in US dollars?

People in Argentina save in US dollars because the peso loses value often. Dollars hold their value better during inflation. Many families keep savings in dollars to protect their money.

How many types of exchange rates exist in Argentina?

Argentina has several exchange rates.

• Official rate

• Blue (informal) rate

• Credit card rate
  Each rate can be different. People often check the blue rate for real prices.