Faced with galloping inflation, Argentina will start printing 10,000 peso notes

BUENOS AIRES, Argentina (AP) — Prices in Argentina have risen so dramatically in recent months that the government has increased the size of its largest banknote in circulation fivefold, to 10,000 pesos, or a worth about 10 dollars.

Tuesday’s announcement by the central bank promises to ease the burden on many Argentines who have to carry giant bags – sometimes suitcases – full of cash for simple transactions. Argentina’s annual inflation rate reached 287% in March, one of the highest in the world.

The new denomination, five times the value of the previous largest note, is expected to hit the streets next month in a bid to “facilitate transactions between users”, the central bank said. The 10,000 peso bill is worth $11 to the country’s official authorities. exchange rate and $9 at the black market exchange rate.

Throughout Argentina, hard currency – particularly the country’s ubiquitous 1,000 peso notes – remains the most popular means of payment. When it was first printed in 2017, the 1,000 peso bill was worth $58 on the black market. Now it’s worth a dollar.

Given the instability caused by Argentina’s worst financial crisis in two decades, sellers are favoring old-fashioned cash payments for large purchases and offering deep discounts to encourage paper invoices rather than electronic transfers.

Argentina’s libertarian President Javier Milei, who took office last December, campaigned on promises to bring inflation under control and stabilize the local currency by reversing the policies of previous left-wing governments that printed money to finance the public expenses.

But in the meantime, his austerity policies have pushed prices to high levels in the United States and Europe, worsening the economic woes of ordinary Argentines. A massive national strike, the latest in a series of protests, is planned for Thursday.

Even though annual inflation remains high, Milei cites a gradual slowdown in Argentina’s monthly inflation rate since last December to insist his plan is working. Convinced that consumer prices can continue to fall, policymakers lowered the central bank’s key interest rate three times last month.

The new 10,000 peso notes feature small artistic portraits of Manuel Belgrano, Argentina’s founding father, and María Remedios del Valle, a black Argentine woman and army captain who rose to fame fighting the War of independence of the country.

Argentina’s central bank announced it would introduce an even bigger note – a 20,000 peso bill – later this year.

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