The Central Bank approved 10k and 20k peso bills

[MilHojas]

El Banco Central aprobó la emisión de billetes de $10.000 y $20.000 | Análisis

La emisión de estas denominaciones "facilitará las transacciones entre los usuarios, hará más eficiente la logística del sistema financiero y permitirá reducir significativamente los costos de adquisición de los billetes terminados", indicó el BCRA.

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[Quilombo]

Better than nothing but still rather low, especially seeing as they won't enter circulation until June.

If monthly inflation remains the same at 25.5% the $20,000 will be worth $9,726 by the time it's on the street, should have just gone with 100K or even 50

 

[elhombresinnombre]

Better than nothing but still rather low, especially seeing as they won't enter circulation until June.

If monthly inflation remains the same at 25.5% the $20,000 will be worth $9,726 by the time it's on the street, should have just gone with 100K or even 50

I'm neither an economist nor a historian so my impression that this will only help fuel inflation is just that: an impression. It's based on two events. 1- The rise in inflation in the UK in the 1970s after the introduction of decimal currency when prices floated upwards towards the new value of the currency and 2- Chile's fight against inflation in the mid-2000s.

In Chile I don't recall them printing bigger notes but I recall that even the tiniest coins were actively in circulation and I believe that acted as a drag on rising prices. Apart from printing higher value notes, the two mistakes being made here - in my strictly nonprofessional opinion - are the drive towards electronic payments where the physical currency becomes irrelevant and the loss of very low value notes and coins. In Chile, in the 2000s they still had a 1cvo coin in circulation. It was a tiny, worthless piece of light alloy and I still have one as a souvenir. In Argentina I estimate the scrap metal value of low value coinage to be about six times face value and one way or another that's driving low value coins out of circulation and helping to drive prices up.

Is this the right place to say, Just my 2¢????

 

[mikic007]

This was working till 2 digits inflation, and before widespread digital payments. Now it's just inconvenience to carry bunch of worthless papers, that takes forever to count, not to mention the cost of manipulation for businesses and state. To get 1 mio usd worth of peso to the bank is now logistic project, that cost a lot more than it would, if you would have higher notes.

Last time my son found 2 peso coin, and I almost cried. 10 years ago it was common payment option, now is less than worthless. Businesses just put prices in round 00 now, and will be doing 000 if needed. Have no impact on inflation itself.

 

[Ries]

I have still not gotten one single 2000 peso bill, either as change or from cuevas.

 

[Quilombo]

I'm neither an economist nor a historian so my impression that this will only help fuel inflation is just that: an impression. It's based on two events. 1- The rise in inflation in the UK in the 1970s after the introduction of decimal currency when prices floated upwards towards the new value of the currency and 2- Chile's fight against inflation in the mid-2000s.

In Chile I don't recall them printing bigger notes but I recall that even the tiniest coins were actively in circulation and I believe that acted as a drag on rising prices. Apart from printing higher value notes, the two mistakes being made here - in my strictly nonprofessional opinion - are the drive towards electronic payments where the physical currency becomes irrelevant and the loss of very low value notes and coins. In Chile, in the 2000s they still had a 1cvo coin in circulation. It was a tiny, worthless piece of light alloy and I still have one as a souvenir. In Argentina I estimate the scrap metal value of low value coinage to be about six times face value and one way or another that's driving low value coins out of circulation and helping to drive prices up.

Is this the right place to say, Just my 2¢????

This has been the K argument, that higher denomination bills cause inflation (or at least draw negative attention to it), but this hasn't been the experience of other countries:

• Singapore and Brunei (in a currency union) have $10,000 SGD/BND notes worth $7,509 USD, though they're no longer being printed and are being removed from circulation
• Switzerland, Brunei, Singapore, Hong Kong, the UAE, and Canada have 1,000 franc, Dirhams, and dollar notes respectively, though Canada stopped printing their $1,000 CAD note in 2000, and have removed it from circulation/revoked it's legal tender status (though they haven't demonetized it, and since it's legal to accept whatever you want as a form of payment in Canada, it's kind of a moot point)
• The EU has 500 Euro bills (I saw one once at a Mediamarkt in Barcelona) but ECB is withdrawing them from circulation IIRC
• Armenia has a 100K Dram bill worth $250 USD and was just in a series of wars with Azerbaijan and they still haven't tanked currency wise compared to Argentina

Out of curiosity I checked, as the Chilean peso recently just passed being equal to 1 Argentine peso, and the largest note in circulation in Chile is 20K, but they also don't have 25% inflation a month so in 6 months 20K CLP will still be worth ~$20 USD while here it will be less than $9 if things keep up. Also Uruguay passed us in parity in 2018 and their largest note, 2,000 UYU is worth $50 USD, so it's not the same either as they've really worked hard to decouple from our economy since 2001.

 

[mikic007]

This has been the K argument, that higher denomination bills cause inflation (or at least draw negative attention to it), but this hasn't been the experience of other countries:

• Singapore and Brunei (in a currency union) have $10,000 SGD/BND notes worth $7,509 USD, though they're no longer being printed and are being removed from circulation
• Switzerland, Brunei, Singapore, Hong Kong, the UAE, and Canada have 1,000 franc, Dirhams, and dollar notes respectively, though Canada stopped printing their $1,000 CAD note in 2000, and have removed it from circulation/revoked it's legal tender status (though they haven't demonetized it, and since it's legal to accept whatever you want as a form of payment in Canada, it's kind of a moot point)
• The EU has 500 Euro bills (I saw one once at a Mediamarkt in Barcelona) but ECB is withdrawing them from circulation IIRC
• Armenia has a 100K Dram bill worth $250 USD and was just in a series of wars with Azerbaijan and they still haven't tanked currency wise compared to Argentina

Out of curiosity I checked, as the Chilean peso recently just passed being equal to 1 Argentine peso, and the largest note in circulation in Chile is 20K, but they also don't have 25% inflation a month so in 6 months 20K CLP will still be worth ~$20 USD while here it will be less than $9 if things keep up. Also Uruguay passed us in parity in 2018 and their largest note, 2,000 UYU is worth $50 USD, so it's not the same either as they've really worked hard to decouple from our economy since 2001.

500€ notes are still fairly common, I am still getting them from banks, so ECB obviously doesn't put much effort in removing them. Main reasons to remove high denomination bills from circulations are connected with crime fighting, but as we see with dollars, it doesn't really work. Crime will find it's way, while for the common folk it's just inconvenient to carry a lot of paper around. You go to buy used car with 20 bills instead of 100 ...

That now the highest bill in Argentina has USD 2 worth is just not sustainable, so I hope they will pass new ones soon. For the government would be however better to make payments with cash a nightmare, so more people would use cards..

 

[Quilombo]

That now the highest bill in Argentina has USD 2 worth is just not sustainable, so I hope they will pass new ones soon. For the government would be however better to make payments with cash a nightmare, so more people would use cards..

I think that's AFIP's hope, yet as you said, it's a moot point, especially if we do manage to dollarize, crime will find a way, whether drug money laundering via caves now, or the crime of getting a 20% discount paying cash.

I have still not gotten one single 2000 peso bill, either as change or from cuevas.

My husband got all 2000s from WU yesterday, he said it was easier to carry, but a PIA because he had to wait to see a teller to deposit them

 

[jbeas176]

colombia has 50,000, 20,000,
10,000 peso bills. theit exchange rate is 4,300.00 to 1. i would think if argentina prints large bills change will become a problem.

 

[retiredbanker]

How do you spell Venezuela?