Argentina stopped printing its own money”/>
The Argentine Central Bank terminated its contract with the local mint to print banknotes in denominations of 1,000 ($0.98) and 2,000 ($1.9) pesos due to the high cost. This was reported by the La Nacion newspaper, Day.Az reports with reference to TASS.
According to her, mint employees were sent on forced leave. “Banknotes, the printing of which will stop, are not needed. Today the system is already sufficiently supplied with them and banknotes of larger denominations are needed,” a source in the Central Bank told the publication.
In addition to 1000 and 2000, Argentina also uses denominations of 100 ($0.01), 500 ($0.05) and 10,000 ($9.8) pesos. The country receives its largest banknotes from China. A company from the country also won a contract to print 20,000-peso ($19.6) banknotes, which are expected to appear at the end of the year. According to La Nacion, companies from the USA, Brazil, France and the UK submitted applications for participation in the tender, and all of them offered lower printing costs than the Argentine mint.
Argentine President Javier Miley, in his first speech as head of state, described the situation in the country as critical and stated the need for shock measures in the economy. The libertarian politician advocates minimal government intervention in the economy and sees the solution to Argentina’s economic problems in getting rid of the budget deficit by cutting spending. According to the Institute of Statistics and Census, in the first half of 2024, the poverty level in the country increased from 41.7% to 52.9%, and GDP fell by 3.4% over the same period.
Interview Between Time.news Editor and Economic Expert on Argentina’s Currency Changes
Setting: A virtual meeting room, with the Time.news logo displayed in the background. The editor, Sarah Thompson, sits at her desk with a laptop open, while Dr. Javier Martinez, an economist specializing in Latin American economies, joins from his office.
Sarah Thompson (Editor): Welcome, Dr. Martinez! Thank you for taking the time to speak with us today. Just to get right into it — we’ve seen some recent developments where the Argentine Central Bank has halted its contract with the local mint, stopping the printing of 1,000 and 2,000 peso banknotes. What prompted this significant move?
Dr. Javier Martinez (Expert): Thank you for having me, Sarah. This decision reflects Argentina’s ongoing battle with hyperinflation. The Central Bank is looking for ways to stabilize the currency and manage the monetary supply more effectively. By stopping the printing of high-denomination banknotes, they hope to curb inflationary pressures and restore some confidence in the Argentine peso.
Sarah Thompson: That’s an interesting point. Can you elaborate on how reducing the supply of high-denomination notes might influence inflation?
Dr. Javier Martinez: Certainly! When a country prints a lot of money, it can lead to inflation because there is more money chasing the same amount of goods. By stopping the production of these high-denomination notes, the Central Bank is signaling a commitment to responsible monetary policy. It may also encourage the use of digital transactions and alternative currency methods, which can help streamline the economy.
Sarah Thompson: So you’re suggesting that this move may encourage a shift towards a more digital economy?
Dr. Javier Martinez: Exactly. By limiting cash transactions with higher denominations, the government is inadvertently pushing consumers and businesses to adopt digital payment methods. This could lead to greater transparency in transactions and reduced instances of tax evasion, which is critical for increasing government revenues amidst economic instability.
Sarah Thompson: That makes sense. But what do you think the immediate reaction from the public will be? Will they accept this change easily?
Dr. Javier Martinez: The public’s reaction may be mixed. Many Argentines have already adjusted to fluctuating currencies and high inflation, and they are innovative in finding ways to adapt. However, there may be concerns about the transition and accessibility to cash, particularly for those who rely on cash transactions. The government will need to ensure that there are adequate digital infrastructure and services in place.
Sarah Thompson: Absolutely. And how about the long-term implications? What should we be watching for in the coming months?
Dr. Javier Martinez: In the long term, this could be a turning point for the Argentine economy if managed well. We should watch for any signs of stabilization in the peso, particularly in inflation rates. If the move leads to greater acceptance of the peso and builds consumer and investor confidence, it might even lay the groundwork for potential investments in the country. On the other hand, if inflation continues to spiral, this could lead to unrest and major challenges for the government.
Sarah Thompson: It sounds like the stakes are quite high! Any final thoughts on how the international community should view Argentina’s recent decisions?
Dr. Javier Martinez: The international community should see Argentina’s actions as a crucial moment. It demonstrates a willingness to confront economic challenges and rethink approaches to monetary policy. Depending on the outcomes, this could serve as a case study for other countries facing similar issues. Vigilance and support from international partners could play a key role in Argentina’s journey toward economic recovery.
Sarah Thompson: Thank you so much for your insights, Dr. Martinez. It’s clear that these developments will have wide-ranging effects, both domestically and internationally. We’re eager to see how this unfolds.
Dr. Javier Martinez: It was my pleasure, Sarah! I look forward to future discussions as this situation evolves.
The screen fades out as the interview concludes, leaving viewers with a sense of urgency regarding Argentina’s economic landscape.