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In the Government they admit “conversations” to get a higher denomination bill: the projects for the $2,000 and $5,000

$5,000 bill from 1977.
$5,000 bill from 1977.

It seems that from time to time everything repeats itself in Argentina. As well as the phenomenon of high inflation that punishes the economy threatens to be here to stay, with the highest rates since 1991, the need for high-denomination bills so that consumption functions with a certain normality returns to the debate.

Now there is talk of the possible issue of a 5,000-peso bill, which would become the highest denomination, taking into account the loss of value of the current one, the 1,000-peso bill, whose purchasing power was consumed just five years after it was issued. birth.

as he was able to reconstruct infobae“there are talks” between officials of the government agencies involved – Ministry of Economy, Central Bank and Casa de la Moneda – to promote the issuance of a new banknote although “no denomination in particular was discussed.”

The complication of making purchases with low denomination bills encourages electronic operations and the “laundering” of the activity

From the chambers of the banking sector, the claims have been reiterated in recent months, due to the high logistical cost involved in the transfer, loading of ATMs and custody of the bills, which increases in proportion to the number of units.

However, it emerged that the entities collide with a certain official reluctance to a higher denomination bill under a fiscal argument: low denomination bills encourage the use of electronic money, given the hassle of loading and using many bills for daily consumption, a habit more and more widespread that contributes to “laundering” and regularizing a good part of the economic activity that is now registered and before it was operated in cash, “in black” and without a ticket.

In this regard, the decision of the Minister of Economy did not go unnoticed, Sergio Massaof replace Rodolfo Gabrielli with Ángel Mario Elettore to the front of the Casa de la Moneda, which is the institution in charge of issuing Argentine banknotes. “We were not satisfied with his management,” he told infobae a source from the Ministry of Economy. As this medium was able to learn, Massa’s discomfort was generated by various aspects in Gabrielli’s management at the head of the organization. Among them, there was talk of an administrative management that left a “red balance”.

The chambers of the banking sector reiterated their claims for the high logistics costs caused by operating with low-denomination bills

Also that the Casa de la Moneda had been developing lines of business that were far from its central purpose and that, moreover, never fully developed. In fact, it is public knowledge that a large part of the banknotes that the Central Bank put on the street this year were produced abroad. Likewise, from Economy they reproached “the delay in start-up of banknote production”.

Argentina already had 5,000 peso bills in the past. Due to evictions and changes in the monetary sign, there was already a broadcast in the 1960s, then it reappeared in 1977 with the image of the elderly José de San Martín. After a removal of zeros, a $5,000 bill arrived with the image of Juan Bautista Alberdi in 1984. And with the change of currency during the government of Raúl Alfonsín, the issue of 5,000 australes with the portrait of José Juárez Celman arrived in 1989.

The $5,000 bill with the portrait of Juan Bautista Alberdi.
The $5,000 bill with the portrait of Juan Bautista Alberdi.

The national senator of Together for Change Beatriz Avila presented a project this week through the Ministry of Economy so that the Central Bank of the Argentine Republic and the Casa de la Moneda adopt the necessary measures to issue new bills of 2,000, 5,000, 10,000 and 20,000 pesos. The legislator based the presentation of her project on the fact that the year 2022 “recorded the highest inflation in 30 years in the Argentine economy.”

“From the pandemic to this part, the need of families and the demand of companies have increased to have more cash, to satisfy the requirements of daily life, added to the injection of amounts of money to unbanked people that they received extraordinary benefits from the State”, Ávila stated.

The banknote with the highest denomination in Argentina is the second among those with the lowest value, in dollars, in the entire region, only behind Venezuela

Already in 2022, the national deputy Federico Angelini presented a similar draft resolution for bills of 2,000, 5,000, 10,000 and 20,000 pesos. “The fall in the purchase value of the highest denomination bill has consequences that go beyond inflation and represent a very important outlay for banks, financial institutions, businesses, companies and SMEs, generating logistics, security, time and space costs” , argument.

In addition, the Angelini stated that “a ticket of such little value in terms of purchasing power represents a higher cost for the State when it comes to issuing; therefore, this proposal would allow savings of between 300 and 400 million dollars”.

the ticket of 1,000 pesos was born in November 2017 and when it began to circulate, it was equivalent to about USD 57 in an economy that did not have an exchange “money”, according to the official exchange rate at that time. Now, just over five years later, it is agreed at less than USD 3 according to the “cash with settlement” price and also the “blue” parity.

To measure the loss of value of the Argentine currency, a basic family basket in November 2017 cost $16,027, while its value as of November 2022 was $145,948. Meanwhile, to purchase a basic food basket, a typical family went from needing $6,568 in November 2017 to $64,012 last November, he highlighted. That is a rise in five years of 811% and 875%, respectively, an increase that was not accompanied by the value of the bills in circulation, since the issue of 1,000 pesos lost 95% of its value against the free dollar.

Due to the impact of inflation, Argentina is approaching a sad record. In a survey among 13 countries in the region, its highest denomination banknote is the one with the least value measured in dollars. In this way, the 1,000-peso paper with the image of the baker is the one with the most limited purchasing power in all of America, without there being any plans in sight to put into circulation a bill of a higher denomination.

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