The size of Argentina’s largest banknote in circulation has increased by five times to 10,000 pesos, or roughly $10, due to the country’s prices rising so sharply in recent months.
The central bank’s decision on Tuesday promised to relieve the burden of several Argentines who have to constantly carry around enormous bags, sometimes even suitcases, filled with cash for small purchases.
Argentina has one of the highest annual inflation rates in the world, with 287% in March.
The goal of the new denomination note, which is five times more valuable than the largest bill ever, is to “facilitate transactions between users,” according to the central bank, and it is anticipated to go on sale next month.
Laptops 1000The official exchange rate for the country values a 10,000 peso note at $11, whereas on the illicit market, it is only worth $9.
Hard cash, more especially the nation’s well-known 1,000 peso notes, is still the most widely used method of payment in Argentina.
The 1,000 peso note was worth $58 on the underground market when it was originally minted in 2017. It is now valued at one dollar.
Vendors prefer traditional cash payments for large purchases due to the volatility caused by Argentina’s worst financial crisis in 20 years. They also give high discounts to encourage paper bills over electronic transfers.
Since taking office in December of last year, libertarian President Javier Milei of Argentina has vowed to reverse the practices of previous left-leaning administrations that issued money to fund public spending to control inflation and stabilize the local currency.
However, in the interim, his strict austerity measures have increased prices to levels seen in the United States and Europe, aggravating the financial difficulties faced by common Argentines.
Thursday is scheduled to see a big nationwide walkout, the most recent in a string of protests.
Milei claims his approach is working even though annual inflation is still high, pointing to a steady decline in Argentina’s monthly inflation rate since last December.
The central bank’s benchmark interest rate was slashed three times last month by policymakers who were confident that consumer prices would continue to decline.
The new 10,000 peso notes have miniature artistic pictures of María Remedios del Valle, a Black Argentine woman and army captain who rose to fame fighting in the country’s War of Independence, and Manuel Belgrano, one of the country’s founding fathers.
The Argentinean central bank said that later this year, a 20,000 peso note would be introduced.
