BUENOS AIRES (AP) — Prices in Argentina have risen so much in recent months that the government has multiplied by five the size of its largest bill in circulation, up to 10,000 pesos, which is equivalent to about $10.
The Central Bank’s announcement on Tuesday promises to lighten the burden of many Argentines who must carry gigantic bags – sometimes suitcases – full of cash to carry out simple transactions. Argentina’s annual inflation rate reached 287% in March, one of the highest in the world.
The new denomination note is expected to hit the streets next month, and will “facilitate transactions between users,” the central bank said. The 10,000 peso bill has a value of 11 dollars at the country’s official exchange rate and 9 dollars at the black market exchange rate.
Across Argentina, cash—specifically the ubiquitous 1,000-peso bills—remains the most popular form 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 unleashed by Argentina’s worst financial crisis in two decades, sellers prefer old-fashioned cash payments for large purchases and offer steep discounts to incentivize paper bills over electronic transfers.
During his campaign, Argentine President Javier Milei, who took office last December, promised to control inflation and stabilize the local currency by reversing the policies of previous leftist governments, which printed money to finance public spending.
But, meanwhile, its harsh austerity policy has skyrocketed prices to levels in the United States and Europe, aggravating the economic problems of ordinary Argentines. A massive nationwide strike is planned for Thursday, the latest in a series of protests.
Although annual inflation remains high, Milei insists his plan is working, based on the gradual slowing of the monthly inflation rate since last December. Confident that consumer prices can continue to fall, central bank officials lowered the benchmark interest rate three times last month.
The new 10,000 peso bills feature small artistic portraits of Manuel Belgrano, one of Argentina’s founding fathers, and María Remedios del Valle, a black Argentine and army captain who gained fame fighting in the country’s War of Independence. .
The Central Bank of Argentina has announced that later this year it will introduce an even larger banknote of 20,000 pesos.
