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In Argentina, everyone is living through record inflation and political upheaval

MICHEL MARTIN, HOST:

Argentina's peso is collapsing. Annual inflation is more than 120%. And things actually got worse for Argentina's currency a couple of months ago when a political outsider named Javier Milei won the presidential primary. His big campaign promise - he says he will get rid of the peso and adopt the U.S. dollar. Amanda Aronczyk of our Planet Money podcast has this report from Buenos Aires.

AMANDA ARONCZYK, BYLINE: Argentina's government has been propping up the peso for years, but when Javier Milei won that primary election, the peso took a real dive. One place where you can see just how little it's worth is at one of the country's many black markets for currency. Cambio means change, or in this context foreign exchange. And I know this music is giving real "Star Wars" cantina vibes - someone was randomly playing a didgeridoo - but I was actually on Florida Street, which is your basic shopping street for tourists. A woman calling out cambio says the exchange rate is 705 pesos for $1.

UNIDENTIFIED PERSON: Yes.

ARONCZYK: Yes, 705.

UNIDENTIFIED PERSON: Yes.

ARONCZYK: This was last month. Earlier this year, the peso was a lot stronger - like, 400 pesos to $1. People in Argentina want U.S. dollars because it's practically impossible to save money when your currency is constantly losing value. So they get dollars and stash them away, literally in mattresses and shoeboxes. But the government wants people to use the peso. They limit access to dollars, hence these black market exchanges.

UNIDENTIFIED PERSON: (Speaking Spanish)

ARONCZYK: The woman didn't want to be identified because these exchanges aren't legal. But she tells me that when the outsider, Milei, won that presidential primary, his promise to get rid of the peso and replace it with the dollar caused panic. People ran to the exchanges, tried to buy up as many dollars as they could. It was like a run on a bank. So the woman says they stopped exchanging pesos for dollars.

UNIDENTIFIED PERSON: (Speaking Spanish).

ARONCZYK: Nobody was selling. They didn't know how long the panic would last, how far the peso would fall. And this wasn't like one of those situations where the stock market takes a hit, but life goes on as normal. Everyone I met in Argentina had a story about this August peso crash and how it affected them, like the very first cab I took. I get in and start chatting with the driver, Juan Pablo Ospina Gomez. I ask him the question I plan to ask pretty much everyone I meet.

When the peso starts to get devalued and is worth less and less, what do you have to do differently?

JUAN PABLO OSPINA GOMEZ: I have to find another job.

ARONCZYK: This will be complicated for Juan Pablo because he's already got three jobs - Uber driving, selling Natura products, which is like Avon but from Brazil, and then there's his main job working for Oreo.

GOMEZ: I work with customer service.

ARONCZYK: So if I have a complaint about my Oreo, I call you.

Also turns out - not a bad job. Because inflation is so high in Argentina, Oreo gives regular raises so that wages keep up.

GOMEZ: They increase our salaries at least three times per year.

ARONCZYK: It's not just some big companies that do this. It works this way for a lot of government employees too. But that is a problem. Argentina's government is essentially printing money to fund those raises.

Now, I'm in this cab because I'm on my way to a small business to find out how they've dealt with the peso's recent plunge. The business I'm going to is a shoe store - tango shoes, actually.

(SOUNDBITE OF MUSIC)

ARONCZYK: Salesman Juan Pablo Viganotti tells me he's used to his store raising prices because of inflation.

How often is the price changing?

JUAN PABLO VIGANOTTI: (Speaking Spanish).

ARONCZYK: He says usually once a month. But in that short time after presidential candidate Milei won the primary...

VIGANOTTI: (Speaking Spanish).

ARONCZYK: You had to change the price three times in two weeks.

VIGANOTTI: Si.

ARONCZYK: Because his store didn't know what to charge. For a few days after that primary, some stores stopped selling stuff completely.

VIGANOTTI: (Speaking Spanish).

ARONCZYK: Juan Pablo says it can be scary to see the peso's value changing so dramatically and so often. He says it's surprising, but...

VIGANOTTI: (Speaking Spanish).

ARONCZYK: He makes a big gesture like, what are you going to do, man? This, I learned, is a very Argentinean response. People are like, hey, it's Argentina. We're used to it, although lately anxiety may be setting in. The elections are 10 days away. And this week, political outsider Milei said, not for the first time, that Argentina's currency is worth less than excrement, and the peso plummeted even further.

Amanda Aronczyk, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Amanda Aronczyk (she/her) is a co-host and reporter for Planet Money, NPR's award-winning podcast that finds creative, entertaining ways to make sense of the big, complicated forces that move our economy. She joined the team in October 2019.