Argentina Approves High Denomination Bill As Inflation Nears 100%

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Argentina Approves High Denomination Bill As Inflation Nears 100%

Argentina’s central bank will print bank notes of larger denomination after months of complaints by residents and tourists who, faced with inflation of near 100% a year, have to carry increasingly bigger piles of cash to pay for everyday purchases.

The monetary authority announced Thursday it authorized the national mint to design a 2,000 peso bank note, double the value of the country’s largest denomination bill today, but still worth about $6 only, according to Argentina’s commonly used informal exchange rates.

Central bank officials were 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.

Scenes reminiscent of Venezuela or other high-inflation countries emerged in Argentina in recent months with tourists paying restaurant bills with stacks of cash and banks running out room to store bank notes destined for ATMs. A gap between Argentina’s official and parallel exchange rates encourages cash use, especially among tourists who arrive with dollar bills.

Digital payments have increased too, the central bank said in a statement. The number of bank transfers rose 99% in December from a year ago, while payments made with QR codes were up 41% over the same period.

Source:- Bloomberg

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