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ECONOMY | 12-01-2024 09:55

Argentina to issue 20,000-peso bills as inflation eclipses 211%

Argentina is preparing to offer larger denomination peso bills in an attempt to simplify daily transactions.

Argentina is preparing to offer larger denomination peso bills in an attempt to simplify daily transactions that require some in the country to carry backpacks stuffed with cash.

The Central Bank said Thursday it approved the production of 10,000-peso and 20,000-peso notes and would make them available by June. The move is intended to make the financial system more efficient and reduce the costs of acquiring older bills. Currently, the largest denomination in circulation is a 2,000 peso note — and even those are rare and highly sought after.

Larger denomination notes will help to ease issues created by soaring prices, with official figures released earlier showing the annual inflation rate hitting 211.4 percent n December. That puts Argentina ahead of Venezuela as the country with the steepest consumer-price gains in Latin America.

Since President Javier Milei devalued the currency by 54 percent in December, the peso has come under fresh pressure. The official exchange rate stood at about 815 pesos per dollar on Thursday, and the Central Bank intends to let it fall by two percent each month. 

The peso has also weakened in parallel markets used to skirt currency controls. And the black market rate, known as “dollar blue,” has slumped to as much as 1,150 pesos per greenback since the beginning of the year.

While the country has now informally adopted the US dollar for many every day transactions, it’s expensive for Argentines to acquire them and local currency is still needed for quotidian tasks like trips to the grocery store, transportation and restaurant meals.

 

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