Argentina's 93 exchange index makes it pricier than Brazil

Argentina's consumer price index (CPI) reached 33.2% over the past 12 months, while Brazil's broad consumer price index (IPCA) stood at 4.44%. At the same time, the bilateral real exchange index Argentina-Brazil, calculated by the Central Bank of Argentina using 2015 = 100 as the base, is at 93 – values below 100 indicate that the peso is strong in real terms relative to the real.

Inflation is the average change in consumer prices over a period; real exchange rate measures the relative purchasing power of two currencies, adjusting the nominal exchange rate for the inflation differential between the countries. Even with high inflation, the Argentine peso remained relatively appreciated compared to the real, raising the cost of Argentine goods for those paying in reais or dollars.

This scenario has reversed the traditional shopping flow at the border. Previously, Brazilians and Paraguayans crossed into Argentina seeking lower prices; now, Argentines cross the Friendship Bridge or the Integration Bridge (which connects Foz do Iguaçu to Presidente Franco) to take advantage of the more favorable real exchange rate and the product variety in Foz do Iguaçu and Ciudad del Este. Electronics, clothing and food stores usually accept reais and offer card payment options, but demand has increased, which can create queues at exchange houses and popular retail points.

Practical tips:

• Exchange money at official exchange houses or banks in the border areas; the real is widely accepted, especially in Foz do Iguaçu.
• Bring some cash to avoid lines at exchange houses and take advantage of the option to pay in reais or by card.
• Check the operating hours of exchange houses and stores before crossing, as high demand may cause longer waits during peak periods.

What this means for you: If you plan to shop at the border, expect higher prices in Argentina and more competitive options in Brazil and Paraguay. Plan to bring reais or international cards, exchange currency at reliable locations, and arrive early at stores to avoid queues.

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FAQ

• Why doesn't Argentina's high inflation make shopping there cheaper?
  • Because a real exchange index of 93 indicates that, despite 33.2% inflation, the peso is strong in real terms against the real, raising product costs for those paying with foreign currencies.
• How should I prepare to shop in Foz do Iguaçu or Ciudad del Este as an Argentine or Brazilian?
  • Exchange money at official exchange houses, bring reais or international cards, and arrive early at stores to avoid queues generated by the surge of Argentine shoppers.

Read also: Where to exchange money at the border and where the real is accepted