With inflation skyrocketing, Argentina put larger denomination bills into circulation

Prices in Argentina have risen so much in recent months that the Central Bank has put into circulation a new bill that multiplies by five the value of the highest paper currency: 10,000 pesos, which is equivalent to about 11 dollars at the country’s official exchange rate. already 9 dollars on the black market.

With this, he hopes to lighten the burden of many Argentines who must carry gigantic bags – sometimes suitcases – full of cash to carry out simple transactions. Argentina’s annual inflation rate reached 287% in Marchone of the highest in the world.

The new denomination note has already begun to be distributed since Tuesday through the country’s network of bank branches and ATMs and “will facilitate transactions between users,” the bank said.

Across Argentina, cash—specifically the ubiquitous 1,000-peso bills—remains the most popular form of payment. When it was first printed in 2017, the 1,000 peso bill was worth $58 on the black market. Now, it’s worth a dollar.

Given the instability unleashed by Argentina’s worst financial crisis In two decades, sellers prefer the old-fashioned cash payment for large purchases and offer considerable discounts to incentivize paper bills over electronic transfers.

During his campaign, the Argentine president, the libertarian Javier Milei, who took office last December, promised to control inflation and stabilize the local currency reversing the policies of previous leftist governments, which printed money to finance public spending.

But its harsh austerity policy has skyrocketed prices, aggravating the economic problems of ordinary Argentines. A massive strike is planned across the country this Thursday, the latest in a series of protests.

Although annual inflation remains high, Milei insists his plan is working, based on the gradual slowing of the monthly inflation rate since last December. Confident that consumer prices can continue to fall, central bank officials lowered the benchmark interest rate three times last month.

The new 10,000 peso bills feature small artistic portraits of Manuel Belgrano, one of Argentina’s founding fathers, and María Remedios del Valle, a black Argentine and army captain who gained fame fighting in the country’s War of Independence. .

The Central Bank of Argentina has announced that in the last quarter of the year it will introduce an even larger bill, of 20,000 pesos.

The introduction of the new 10,000 peso bill into circulation is known shortly after the arrival of imported paper money from China.

[Con información de AP]

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