In a move that surprised very few on Wednesday, credit rating agency Standard & Poor's deemed Argentina to be in default of its debt to bondholders in New York. The default has been perceived as imminent, as the negotiations between Argentine finance ministers and bondholders had been described as icy, at best.
The talks broke down after creditors demanded a payment from the Argentine government of $1.5 billion on their bonds, something that the government would not oblige.
The country, already in a recession, will likely have to devalue the peso in order to spur foreign investors to push the economy to a modicum of liquidity and dynamism. The peso has already fallen approximately 25% this year against the dollar.
Because Argentina was insulated against the international economy after its previous default in 2001, the shocks to the world will be much less drastic, or even hardly noticeable.
It took only 7% of Argentina's creditors to reject the government's bond repayment proposal and incite a default.
Deemed as "vulture funds" by Argentine Prisident Christina Kirchner, the bondholders held out in the hopes that they could get higher returns than the other 93% of debt holders. The Argentine government was unwilling to comply with those demands because, as finance minister Axel Kicillof stated, "it can't be done."
What does this mean for travel in Argentina? Simply that it is more affordable for the average traveler than ever before. Buenos Aires, the capitol of the country, is renowned for its cultural prosperity and barbecued beef, all of which is extremely affordable when translated into the American dollar.
Even living costs in the city are far cheaper than anything that one would find in New York City or Los Angeles: rent prices, according to numbeo.com, average around $512 dollars for one bedroom in the city center, whereas in New York, the average cost for a single bedroom in the middle of Manhattan reaches nearly $3000 per month. Even living outside of New York City is expensive, ranging between $1500 and $2000 per month for a single room; in Buenos Aires, a room outside the city center would only be approximately $400 per month.
Now is the time to book a winter holiday to Argentina, as it will be their summer and the tango and barbecue will be in full swing.
This article is copyrighted by Travelers Today, the travel news leader
