Prices in Argentina have surged so dramatically in recent months that the government has multiplied the size of its biggest bank note in circulation by five – to 10,000 pesos, worth about $US10 ($A15).
The central bank announcement on Tuesday promised to lighten the load for many Argentines who must carry around giant bags – occasionally, suitcases – stuffed with cash for simple transactions.
Argentina’s annual inflation rate reached 287 per cent in March, among the highest in the world.
The new denomination note – five times the value of the previous biggest bill – is expected to hit the streets in June in a bid to “facilitate transactions between users”, the central bank said. The 10,000 peso note is worth $US11 ($A17) at the country’s official exchange rate and $US9 ($A14) at the black market exchange rate.
Across Argentina, hard currency – specifically, the country’s ubiquitous 1,000-peso notes – remains the most popular way to pay for things. When first printed in 2017, the 1,000-peso note was worth $US58 on the black market. Now, it’s worth one US dollar.
Given the instability unleashed by Argentina’s worst financial crisis in two decades, vendors prefer old-fashioned cash payments for big purchases and offer steep discounts to incentivise paper bills over electronic transfers.
Argentina’s libertarian President Javier Milei, who took office last December, campaigned on a promise to tame inflation and stabilise the local currency by reversing the policies of past left-leaning governments that printed money to finance public spending.
But in the meantime, his harsh austerity drive has pushed prices up to levels in the US and Europe, adding to the economic woes of ordinary Argentines. A massive nationwide strike, the latest in a series of protests, is planned for Thursday.
Even as annual inflation remains high, Milei cites a gradual slowdown in Argentina’s monthly inflation rate since last December to insist his plan is working. Confident consumer prices can continue creeping downward, 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, a founding father of Argentina, and Maria Remedios del Valle, a Black Argentine woman and army captain who gained fame fighting the country’s War of Independence.
Argentina’s central bank said it would introduce an even bigger bill, a 20,000-peso note, later in 2024.