Argentina introduces larger bank note amid galloping inflation

BUENOS AIRES, Argentina (AP) — Argentina has put a new 2,000-peso bill into circulation as the country endures one of the world’s highest inflation rates that has decimated the value of the local currency.

The new bank note is worth double the previous highest bill in circulation, but is still worth only $8.21 at the official exchange rate and $4.08 at black-market rates. Stringent capital controls mean that access to the official foreign exchange market is extremely limited, and the peso is worth far less in parallel markets.

With an annual inflation rate that hit 109% in April, retail businesses and banks have been complaining about the difficulties of operating when the highest bill in circulation is of such little real value.

People paying bills with wads of cash has become a common sight and ATMs regularly run out of money, particularly on weekends and holidays.

A large sector of Argentina’s economy is informal so cash payments remain common.

The Central Bank said in a news release that while the process of digitizing payments is advancing, the 2,000-peso bill will “improve the functioning of ATMs and, at the same time, optimize the transport of cash.”

The new bill pays homage to the country’s public health system and features the portraits of doctors Cecilia Grierson, the country’s first female doctor, and Ramón Carrillo, the first health minister.

The distribution of the new bills is expected to be gradual as banks receive them.

Consumer prices rose 8.4% in April compared to the previous month, with inflation reaching 32% in the first four months of the year, according to the state-run INDEC statistics agency

Economic consultancies expect May inflation to be even higher and estimate an inflation rate of at least 130% for the year.