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Sunday, June 4, 2023

Central Bank of Argentina to Issue New 2000 Peso Bill as Inflation Keeps Rising

Central Bank of Argentina to Issue New 2000 Peso Bill as Inflation Keeps Rising – The Central Bank of Argentina has introduced a new initiative to improve the use of cash as a payment method in the country. A new 2,000 peso bill has been issued to make paying with cash for goods and services easier.

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The recently issued bill with double the value of the current highest bill serves as a temporary solution while the central bank works towards promoting the adoption of digital payment systems in a high inflation scenario. In a press release issued, the central bank declared: “While the payment digitization process progresses, this higher denomination bill will improve the operation of ATMs and at the same time optimize the transfer of cash.”

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The bill, whose issuance date was not announced, was designed to commemorate the development of science and medicine in the country. This action aimed to ease some of the difficulties faced by cash-paying citizens in Argentina has already been deemed insufficient by some local analysts. 

They anticipate that its usefulness will soon diminish due to the country’s growing inflation and devaluation. Juan Pablo Albornoz, an economist at Invecq, a local consulting firm, stated: “Issuing a bill of 2,000 (pesos) indicates that the maximum denomination is still ridiculously low, it is not even 6 dollars. It does not solve the problems and possibly soon we will see the 5,000 (peso bill) go into circulation.” Argentina has made progress in digitalizing its payment system, with a surge in QR payments reaching record levels last year. 

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However, a significant portion of the economy still relies on cash transactions, forcing people to store large amounts of money. According to Statista, in 2021, nearly 45% of all point of sale payments were made in cash. Furthermore, a survey by global security firm Prosegur in December revealed that two-thirds of Argentines prefer to receive cash payments due to fees and delays with alternative payment methods such as digital transfers and debit or credit cards.


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