With inflation soaring, Argentina will start printing 10,000 peso notes

Buenos Aires, Argentina — Prices in Argentina have risen so dramatically in recent months that the government has multiplied by five the size of its largest bill in circulation: 10,000 pesos, worth about $10.

The central bank’s announcement on Tuesday promised to lighten the burden for many Argentines who must carry giant bags (occasionally suitcases) full of cash for simple transactions. Argentina’s annual inflation rate reached 287% in March, among the highest in the world.

The new denomination note, 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 dollars in the country’s official currency. exchange rate and $9 at the black market exchange rate.

Across Argentina, hard currency (specifically, the country’s ubiquitous 1,000-peso bills) remains the most popular way to pay for things. 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 deep discounts to incentivize paper invoices instead of electronic transfers.

Argentina’s libertarian president, Javier Milei, who took office last December, campaigned on a promise to control inflation and stabilize the local currency by reversing the policies of previous leftist governments that printed money to finance public spending.

But in the meantime, his harsh austerity campaign has raised prices to levels in the United States and Europe, compounding the economic woes of ordinary Argentines. A massive national strike is planned for Thursday, the latest in a series of protests.

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 that consumer prices can continue to fall, authorities cut the central bank’s key interest rate three times last month.

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

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