In less than a year sterling has become one of the worst performing currencies against the dollar, falling behind even the Argentine peso. I’m no economist by any means, but as a Brit living in Argentina, it’s fascinating to see the disturbing parallels between two distinctly different economies – even if it’s just purely perception.
When we went back to England in July, immediately after Brexit, there was much talk about the state of the economy but nothing much had changed. Sterling had of course fallen against the dollar, but it was still worth something. Moreover, pound notes looked like quality – large, emblematic of a seemingly prosperous country and a currency to be handled with pride.
On the contrary, the Argentine peso looks and feels it worth – dare I say it, like Monopoly money. Similar to the pages of an antiquated book, the notes pretty much crumble as soon as you touch them (although the former is significantly valuable while the latter is, well, monopoly fare). Secondly, you’re often lucky if you can actually get the notes, even though Argentina is still predominantly a cash economy. On countless occasions, we’ve tried to withdraw money from the ATMs only to find out they have run out of cash.
That’s just from the outside. In Argentina, inflation is expected to be about 40-42% this year. Although monthly inflation has calmed down in the second half, overall prices for everything – from consumer goods to utility bills – have increased. Argentine media continues to portray how expensive fruit, veg and meat are becoming (yawn). I tried to keep track of prices in the supermarkets, but I’ve now run out of drawer space for all my receipts.
When we arrived in Buenos Aires more than 18 months ago, my husband and I joked that we’d just spend all our pesos during our time here. There wouldn’t be much point bringing any of the currency home, expect maybe to be used as roll-ups, but then we don’t smoke. Although we had an inkling before we came out, we soon realised that anything we would want to buy - like clothes, or electronics – are at least 50% more than in the UK, and of inferior quality.
So, even though we’re earning far less than we were in the UK – down from two decent salaries to one and a sixteenth - we're somehow saving more than ever before. Partly this is because there is nothing we want to buy. Another reason is that we've been lucky enough to have visitors come out last year. That was at a time when the previous government had maintained currency controls on the peso, so we able to give our friends and families pesos in exchange for dollars or sterling.
However, as sterling now seems to heading towards a steady decline our pesos appear to be far more valuable - having gone from 20 pesos to the pound before Brexit to about 18 pesos now. Almost a year ago, no one wanted Argentine pesos, except my uncle who’s into collecting different currencies (I still haven’t found a non-tatty note for him). Now, with retailers warning the UK government of Brexit consumer price rises, maybe I need to take handle my pesos with better care, she says smugly.