The bill is already being criticized as an insufficient measure.
The Central Bank of Argentina announced the issuance of a new 2,000-peso bill, with the aim of easing the burden of using cash for payments in the country. The bill, which will be worth just over $5 blue dollars (the informal exchange rate), is already being criticized as an insufficient measure.
The new 2,000-peso bill was announced after the country suffered its worst price rise since 1991 last year, with inflation close to 95%. It was the fourth highest inflation rate in the world after Venezuela, Zimbabwe and Lebanon.
Argentine Central Bank Announces 2,000 Peso Bill
The Central Bank of Argentina has taken a new measure in its search to ensure the usability of cash as a means of payment in the country. The bank has announced the issuance of a new 2,000-peso bill, which simplifies the task of paying for goods and services in the country in cash.
The new note, which doubles the value of the current highest value note, is designed to be a stopgap while the central bank increases the use of digital payment rails in a highly inflationary environment. In a press release issued on February 2, the central bank stated the following:
“As the process of digitizing payments progresses, this higher denomination note will improve the operation of ATMs and at the same time optimize the transfer of cash.”
The bill, whose issuance date was not announced, was designed to commemorate the development of science and medicine in the country.
An Insufficient Measure
While this measure is aimed at alleviating some of the problems of cash-paying citizens in Argentina, the measure has already been criticized as insufficient by some local analysts, who forecast that it will quickly lose its usefulness due to rising inflation and devaluation in Argentina.
Juan Pablo Albornoz, an economist at Invecq, a local consultancy, stated that “issuing a 2,000 [peso] bill indicates that the maximum denomination is still ridiculously low, it doesn’t even reach 6 dollars. It does not solve the problems and possibly soon we will see the 5,000 [peso bill] go into circulation.”
Although Argentina has made progress in digitizing its payment system, with QR payments reaching record numbers last year, a significant part of the economy is still cash-based, affecting Argentines who have to accumulate large amounts of tickets to carry out transactions. According to Statista, in 2021, almost 45% of all payments made at POS (point of sale) terminals were in cash.
Additionally, a survey conducted by global security firm Prosegur in December found that two out of three Argentines prefer to receive payments in cash due to the fees and delays associated with other payment methods, such as digital transfers and debit or credit cards.
By Audy Castaneda