President Alberto Fernández He rejected that the Government seeks to advance the idea of printing 5,000 peso bills: “We do not do it”, He asserted to close the rumors about such a possibility to streamline the timing of the monetary issue.
“We are not going to make a 5,000 peso bill. It was an idea that circulated, but we are not going to do it ”, insisted the President.
The versions had emerged this Monday in a context in which even the highest denomination banknotes lose relevance due to the rise in prices and the exchange rate. But in addition, the huge cash injection accompanying efforts to boost the economy amid the coronavirus pandemic becomes cumbersome, and the fact that there is less paper could simplify it.
That is why the possibility of launching banknotes of higher denominations, of up to $ 5,000, that allowed to print currency at a rate more in line with the growth of money in circulation, transcended earlier today.
The Casa de la Moneda does not have enough to keep up with the monetary issue and the part of this expansion that is transformed into physical banknotes. Between March 30 and April 15, without going any further, the monetary base –equivalent to all cash held by the public plus that deposited in banks and in the current account of financial institutions at the Central Bank– It grew about $ 413,500 million, just over 20%, to reach $ 2,438,830 million.
However, the head of state undertook today to dismiss this possibility.
Notably the $ 1,000 bill, today the largest denomination, is worth a little more than USD 14 if the inaccessible official exchange rate is taken, while it barely buys USD 8 if the parallel exchange rate is taken.
This morning the former head of the central bank, Federico Sturzenegger He questioned the transcendence of the issuance of the 5,000-peso bill and made a defense of the banknotes with animal figures that the monetary entity carried out under his management in 2016.
“Today we receive the news of the 5000 banknote – which includes well-known characters that I do not have to anticipate – but that changes the banknote family once again. It seems a trivial issue when inflation is at levels that it has maintained since the end of 2018. But it is worth some reflection ”, He maintained in a message published on Twitter.
In this sense, he continued: “In 2016 the highest denomination banknote had been for 100 years. It lost value as prices rose. Having introduced higher denomination banknotes in a more logical way would have saved $ 650 million in printing costs between 2011 and 2015“
According to the former head of the Central, that delay in 2016 gave meaning to a change of family since the new banknotes would be half of those that would circulate. He added that for this reason the monetary authority proposed the change to a family that “would better highlight one of the themes of our time: caring for the environment.”
“Replacing heroes with flora and fauna, sought to emphasize the vitality of a society that was specifically connected to its current and future problems. It involved taking a look at the future and not the past, “he said.
And he concluded: “Finally, there was an intention to cut through the crack. Many countries have gone down this path. The Euro, for example, buries centuries of conflict by describing the history of architecture with non-existent buildings ”.