From October on there will be a new kid on the block, in the form of a AR $1000 note complete with the image of Argentina’s national emblem, the hornero bird. It will replace the 500 peso bill as the highest denomination of bank note in current circulation, and will constitute 11% of the total emission of paper money, according to El Cronista Comercial. At the same time, a new design of the 20 peso note will be released, along with a new 5 peso coin. From next year, a new 10 peso coin will be introduced and the lowest denomination of paper notes will be the 20 peso bill, with all smaller notes being destroyed.

With this move, the Central Bank, under the direction of its president Federico Sturzenegger, is looking to reduce costs, relieve the strain on storage space and produce better quality money. To elaborate, it is much cheaper for banks to produce coins than print notes, and coins also have a much longer self life than notes (hence the move to coinage for denominations under 20). The cost of printing each note is AR$ 2 and they only have a life of one and a half years. The goal is to destroy 10 million pesos worth of notes each day. Larger denominations of notes also means fewer notes, which means a more efficient use of space in bank branches.

Introducing a higher denomination of bank note is also a sensible move for a high-inflation economy, as well as one with broad participation in informal, cash-based economies; in a country where rent can often be paid for in cash, it makes sense to have a few larger notes in circulation. But we still seem to be very attached to those purple favorites: the 100 peso bill. According to CeSur, (the Center for Economic Studies of South), out of the total (66.3%). One reason for this is that $200 and $500 notes are more expensive to buy.

The landing of the hornero bird represents the Macri administration’s aim to replace all historic leaders on bank notes with animals, in an attempt to depoliticize the currency. As such, the 500 peso note which came in last year, bears the image of the yaguarete. Similarly, Juan Manuel de Rosas, who led the Battle of Vuelta de Obligado against the Anglo-French invasion is getting the axe as the face of the 20 peso note, which will feature a guanaco, a South American camelid.



Publicado en Bubble.ar

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