The actual is gaining buying energy in Latin American nations

The actual carried out higher in opposition to the greenback than the Mexican, Chilean and Colombian pesos (Credit score: Marcello Casal Jr./Agência Brasil)

The devaluation of the Argentine peso has turned the neighboring nation into an advantageous vacation spot for Brazilian vacationers. However the enhance within the buying energy of the true shouldn’t be an remoted case, as the mixture of exterior financial components and home political crises have pressured the value of different Latin American currencies not solely in opposition to the greenback but additionally in opposition to the true – which helps the lives of those that are . plans to journey to sure locations in Latin America.

Based on knowledge from the Decolar web site, cities comparable to Buenos Aires and Bariloche (Argentina), Santiago (Chile), Montevideo (Uruguay) and Lima (Peru) have been among the many most sought-after worldwide locations for the reason that starting of the yr. by vacationers from Brazil. The selection coincides with the record of nations whose currencies have depreciated extra in opposition to the greenback than the true.

Argentina’s new financial system minister will meet with the top of the IMF on Monday

Based on consultants consulted by Estadão, final yr the true carried out higher in opposition to the greenback than the Mexican, Chilean and Colombian pesos, for instance. For XP economist Francisco Nobre, rising commodity costs are additionally placing stress on South American currencies, as a result of nations’ dependence on merchandise which might be traded in {dollars}.

Nonetheless, if the change price of currencies in Latin America varies so much, how do you do the mathematics to know if a specific nation is price going to? Based on C6 Financial institution monetary educator Liao Yu Chieh, the reply is: it is advisable to analysis the costs of eating places, vacationer points of interest and grocery store meals.

All this helps to know not solely the conversion, however how a lot the precise purchases in every vacation spot. “One of the simplest ways to make the most of the foreign money devaluation is to review the price of dwelling within the nation and create a roadmap,” says Chieh.

BIG MAC INDEX. An financial index that may make the duty simpler is the “Huge Mac index”, created by the American journal economist in 1986. The information analyzes the value of a fast-food chain sandwich in varied nations relative to the US greenback. “This index has limitations, however it’s a straightforward approach to examine the price of dwelling in several nations,” says Nobre.

Based on the survey, in December 2021, the typical value of a Huge Mac in Brazil was R$22.90. On the time, the worth of a snack within the US can be $30.85 actual for a Brazilian, with a 25.77% discount in buying energy. Primarily based on the present change price variation, this unfold will increase to 27.95%, with the sandwich at R$31.78.

A Estadão took under consideration the Huge Mac index to investigate the buying energy of the true in 11 nations (US and ten Latin Individuals). Based on the index, the true has better buying energy than the true in 9 of those locations.

On the present change price, the Brazilian foreign money’s strongest efficiency is in opposition to the Colombian peso – 1 Colombian peso is equal to R$0.0012. Within the case of Argentina, the principle worldwide vacation spot for Brazilians, the peso has devalued 22% in opposition to the true and 23% in opposition to the US greenback in a yr.

Of the Latin American nations analyzed by economist, the true solely has much less buying energy than the Uruguayan peso. At the moment, the standard McDonald’s sandwich would value $30.82 actual within the nation, or 25.7% greater than right here.

PLANNING. If the change distinction brings positive factors within the buying energy of the true, lack of planning on the time of conversion can undermine this distinction and even depart the Brazilian at a loss. Specialist C6 reminds us that when touring internationally, it is essential to pay attention to foreign money conversion charges and bank card utilization. “In Brazil, the price of foreign currency echange is excessive. So vacationers want to pay attention to their wants,” he says.

One other tip from the monetary educator is to purchase {dollars} as an alternative of pesos (from any nation). “If you get to your vacation spot, you change to native cash, however extra nations settle for funds made in US foreign money,” he says.


Watch out for conversion

The change price of currencies in Latin America varies vastly, and it’s essential to do the mathematics properly to know which nation is essentially the most advantageous by way of buying energy.


One tip is for vacationers to organize by shopping for {dollars} at a time, as an alternative of pesos (from any nation). Based on C6 financial institution specialist Liao Yu Chieh, along with the advantageous conversion, a part of the items normally settle for American foreign money.

Weak coin in hand

Because the currencies of many Latin American nations depreciate, shopping for the native foreign money solely on the vacation spot prevents the patron from making a loss by holding “leftovers” of weak foreign money; the greenback can be utilized anytime on the subsequent journey.


Based on consultants, a pitfall will be the shortage of consideration to overseas foreign money conversion charges. Care have to be taken when utilizing the bank card, which routinely features a 6% payment along with the IOF.

Past the Huge Mac

One other essential tip is to know not simply the foreign money conversion price, however what the true is price in observe at your chosen vacation spot. Private finance consultants counsel that vacationers analysis subjects comparable to restaurant costs, vacationer points of interest and grocery store meals.

The knowledge is from the newspaper. State of São Paulo.

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