Fragile currency, large denomination… Argentina launches a 10,000 peso note to try to facilitate transactions

The Central Bank is already planning a 20,000 peso note for the end of the year, while the country is experiencing devouring inflation.

Almost a year after launching a 2,000 peso note, Argentina launched a 10,000 peso note on Tuesday, May 7, which is the largest denomination now in circulation. That works out to about $11. The Central Bank (BCRA) took this initiative in particular to “to facilitate transactions”, while the country is experiencing galloping inflation. A 20,000 peso bill is already planned “for the last quarter of the year”.

Exactly a year ago, the previous center-left Peronist government launched a 2,000 peso note ($8.50 at the time at the official exchange, but $2.20 now), to cope to a continued depreciation of its currency and already devouring inflation (+211% over the year 2023). The government has changed and the new ultraliberal president Javier Milei is administering an austerity cure to the economy and the State, after a sharp devaluation. But inflation is slow to come down (+51% in the first quarter), and the peso, although stabilized around 900 to the dollar, is still overvalued in the eyes of many economists.

The government prefers a slow, sliding and controlled depreciation, but the banks demanded denominations larger than the 2,000 peso note. In Buenos Aires, this amount currently allows you to buy a coffee and a “media luna” (mini local croissant) in a rather low-end establishment.

The new denomination of 10,000 pesos bears the effigies of Manuel Belgrano and Maria Remedios del Valle, heroes of independence. The entry into circulation of these new denominations raises the question of the future of those of 10 or 20 pesos (1 or 2 cents), which consumers and merchants no longer even count, underlines the press. However, cash remains crucial, while the informal economy represents 47%, according to the International Labor Organization.