Fragile currency, large denominations… Argentina launches a 10,000 peso note to ease transactions

The Central Bank is already planning a 20,000-peso bill by the end of the year as the country faces devouring inflation.

Nearly a year after launching a 2,000-peso bill, Argentina on Tuesday, May 7, launched a 10,000-peso bill, the largest denomination now in circulation. That amounts to approximately $11. The Central Bank (BCRA) has taken up this initiative in particular “to facilitate transactions”, while the country is struggling with galloping inflation. A 20,000 peso bill is already planned “for the last quarter of the year”.

Exactly a year ago, the previous center-left Peronist government launched a 2,000 peso note ($8.50 at the time on the official exchange, but $2.20 now) to cope with the continued depreciation of its currency and already consuming inflation ( +211% compared to the last century). the year 2023). The government has changed and the new ultra-liberal president Javier Milei is applying an austerity cure to the economy and the state, after a sharp devaluation. But inflation is slowly falling (+51% in the first quarter) and the peso, although stabilized around 900 against the dollar, is still overvalued in the eyes of many economists.

The government prefers a slow, sliding and controlled depreciation, but the banks demanded denominations larger than the 2,000 peso note. In Buenos Aires you can currently buy a coffee and a “media luna” (mini local croissant) in quite a low end establishment.

The new denomination of 10,000 pesos bears the likenesses of Manuel Belgrano and Maria Remedios del Valle, heroes of the independence. The introduction of these new denominations raises questions about the future of 10 or 20 pesos (1 or 2 cents), which consumers and traders no longer even count, the press points out. However, cash remains crucial, with the informal economy accounting for 47%, according to the International Labor Organization.