Argentina launches bigger banknote amid runaway inflation
Argentina has released a new 2,000 peso note into circulation as the country continues to suffer one of the highest rates of inflation in the world which has decimated the value of the local currency
Buenos Aires, Argentina — Argentina has put a new 2,000 peso note into circulation as the country suffers one of the highest rates of inflation in the world which has decimated the value of the local currency.
The new banknote is worth double the previous highest note in circulation, but is still only worth $8.21 at the official exchange rate and $4.08 at the black market rate. Strict capital controls mean that access to the official foreign exchange market is extremely limited and the peso is worth much less in the parallel markets.
With annual inflation hitting 109% in April, retail businesses and banks are complaining about operating difficulties when the highest note in circulation has so little real value.
People paying their bills with wads of cash have become commonplace, and ATMs regularly run out of cash, especially on weekends and holidays.
Much of Argentina’s economy is informal, so cash payments remain common.
The Central Bank said in a press release that if the process of digitizing payments progresses, the 2,000 peso note “will improve the functioning of ATMs and, at the same time, optimize the transportation of cash.”
The new bill pays tribute to the country’s public health system and features the portraits of doctors Cecilia Grierson, the country’s first female doctor, and Ramón Carrillo, the first health minister.
The distribution of new banknotes should be gradual as the banks receive them.
Consumer prices rose 8.4% in April from the previous month, with inflation hitting 32% in the first four months of the year, according to national statistics agency INDEC.
Economic consultants expect inflation in May to be even higher and estimate an inflation rate of at least 130% for the year.
ABC News
