Am I adversely affected in Argentina with inflation going up ?

Discussion in 'Economics' started by deucy28, Feb 18, 2011.

  1. deucy28


    Simple question, but I have no experience to know the answer.

    I am an American citizen and receiving a retirement check from an American firm I worked for.

    Scenario: I move to Argentina for a few years. While there, inflation moves price robustly. I pay for goods and services like the locals do at the same price they do. But do I become generally unaffected because the currency rate of exchange between the U.S. dollar and the Argentinian currency changes ? My question is, WILL there be daily changes in the currency exchange rate ?

    This indeed may become a real world scenario for me and is an important question.

    Thank you in advance.
  2. The answer is, unfortunately, "it depends". All sorts of things can happen.
  3. deucy28


    We know inflation devalues the currency. I was just wondering how fast this becomes manifested in the exchange currency rate.

    Obviously, if USA dollar inflates as fast as Argentina dollar, there would be no movement in the exchange rate between the two currencies.

    (1) But for ease of discussion, if US dollar is stable, and there is consistent and rampant inflation in Argentina, when is this manifested in the exchange rate ?

    (2) In the scenario cited in (1) above, if the currency exchange rate does not change quickly to compensate quickly for consistent and rampant inflation in Argentina, how can I best protect myself as an American living in Argentina during those inflationary times with a fixed income from a USA corporate pension ?