How Argentina is trying to win its struggle with an 83% rate of inflation

STEVE INSKEEP, HOST:

You think U.S. inflation is bad? Eight percent, more or less - certainly more than we're used to. But Argentina has an inflation rate of 83%. The government has announced new exchange rates between the U.S. dollar and the country's peso. Here's Amanda Aronczyk from NPR's Planet Money podcast.

AMANDA ARONCZYK, BYLINE: Lucas Babic is 42 years old. He's a freelance video editor. He's originally from Brazil, but he's been living in Argentina for the past 30 years.

LUCAS BABIC: I've been suffering Argentina since '92.

ARONCZYK: When I call him on Zoom, he is fuming about one of the new exchange rates set by the government.

BABIC: We have the Coldplay dollar.

ARONCZYK: He's also literally fuming. I watched him chain-smoke three cigarettes in a row.

BABIC: Coldplay is coming to Argentina. They're going to come to Argentina and play their songs that I hate - like, boring or whatever. But there is a Coldplay dollar. Can you believe it?

ARONCZYK: These are not dollars with lead singer Chris Martin's face on them, although that would be fun. It's a nickname for a particular exchange rate. There's also been a soy dollar, a Qatar dollar, a Netflix dollar.

NICOLAS SALDIAS: They're for different sectors of the economy and different economic activities.

ARONCZYK: Nicolas Saldias, an analyst with the Economist Intelligence Unit, says that that Qatar dollar - it's supposed to hit Argentines who are traveling to - where else? - Qatar next month to watch the World Cup. And it is a lousy exchange rate.

SALDIAS: The whole idea there is to disincentivize people to go outside to Qatar.

ARONCZYK: Because the government of Argentina wants people to spend their tourism dollars at home, not overseas. On the other hand, the soy dollar - that was a good exchange rate, set up to encourage exporters to sell their soybeans because that brings dollars into the country. Now, there is one more exchange rate, and this one is not set by the government.

BABIC: That's what we call the blue dollar.

ARONCZYK: A blue dollar is a U.S. dollar bought at the black market exchange rate. Everybody who can buys dollars because they will not lose value like the peso.

BABIC: If you can, like, hold on like a grudge to dollars in Argentina, yes, you're rich.

ARONCZYK: Then mid-sentence...

BABIC: I'm really, like, standing up and going away. I'm sorry.

ARONCZYK: OK, Lucas has, like, wandered away.

BABIC: But, like, for real...

(SOUNDBITE OF CONTAINER SHAKING)

BABIC: ...This is my shoebox.

ARONCZYK: He went to the closet, and now he's back. He is holding a plastic bin where he stashes U.S. dollars.

BABIC: I got - let me see - like, 10 and 20, and I wish I had more.

ARONCZYK: Lucas is like a lot of people in Argentina right now - hit by rising inflation, a shrinking peso, a dollar that keeps getting stronger.

BABIC: To get to the end of the month, you have to really, really work it out to pay the rent and the lights and the water and your phone.

ARONCZYK: Which is also what the government of Argentina is doing, trying to work it out by creating all of these different exchange rates because its shoebox of U.S. dollars is looking pretty empty, and the government needs dollars, too, to pay off billions in international debts and to keep the lights on.

Amanda Aronczyk, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.