Tuesday, May 28, 2024

ECONOMY | 02-02-2023 17:43

Argentina’s Central Bank approves higher denomination 2,000-peso bill

Monetary authority approves move to accommodate the needs of banks and shopkeepers; More than eight billion banknotes in circulation in Argentina, with inflation eating away at value of each.

Argentina’s Central Bank has confirmed it will issue a new 2,000-peso banknote in order to meet the demands of the financial system amid soaring inflation.

The news comes amid constant complaints from businesses, residents and tourists who, faced with an annual inflation rate of 95 percent a year, have to carry increasingly bigger piles of cash to pay for everyday purchases.  

The new banknote, designed in collaboration with the Mint and approved this week by the Central Bank’s board of directors, is double the value of the country's largest denomination today. 

Its design will honour the development of science and medicine in Argentina with the ANLIS-Instituto Malbrán and Doctors Cecilia Grierson and Ramón Carrillo, both pioneers in the development of medicine, as the protagonists.

The front of the banknote will portray Grierson and Carrillo with the building of the Instituto Nacional de Microbiología Dr. Carlos G. Malbrán on the back, the Central Bank confirmed.

“While the process of digitising payments advances, this banknote of a higher value will permit ATMS to function and at the same time optimise cash flow,” read a Central Bank communiqué.

Officials have been reluctant to print higher-value bank notes for months, insisting that investment in digital payment platforms was a better use of resources. The decision to launch a 2,000-peso bill hints at that hesitancy: Local media had reported that denominations of as much as 10,000 pesos were being considered. 

According to Central Bank data, this year kicked off with a record 8.064 billion banknotes in circulation. Of this total, 3.0865 billion (38 percent) correspond to banknotes of 1,000 pesos, which last year became those in most circulation in the country, and 1.346 billion (16 percent) to 500-peso bills.

In the face of this situation, some banks had to build new vaults and inland warehouses or optimise their space to store the quantity of excess banknotes.

The Central Bank said that it would be pushing the use of electronic means of payment in transactions with innovative methods whose development is permitted by the programme Transferencia 3.0.

Immediate transfers grew by 98.8 percent in the last month of 2022 as against the previous December while transfers via the interoperable QR code rose 41.4 percent in the same period.

This trend also extended to cheque payments with the participation of ECHEQ reaching 33.1 percent of transactions and 57.9 percent of the money involved.




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