Argen to Introduce 'New Highest Denomination Banknote' Amid Soaring Inflation

[Asia Economy Reporter Jeong Hyunjin] Argentina announced that it will introduce a new highest denomination banknote, the 2000 peso (about 13,000 won) bill, according to BBC and other media on the 2nd (local time). The need for high-denomination bills has increased due to severe inflation that caused prices to double over the past year.

[Image source=Reuters Yonhap News]

According to reports, the Central Bank of Argentina (BCRA) issued a statement on the day announcing plans to introduce the 2000 peso banknote. Currently, six types of banknotes are in circulation in Argentina: 20 peso, 50 peso, 100 peso, 200 peso, 500 peso, and 1000 peso bills, all issued since 1992.

This decision appears to be due to the fact that Argentina's inflation rate reached 94.8% last year, causing the value of existing banknotes to drop significantly. It is not yet clear when the 2000 peso bill will be issued and put into circulation.

Some critics argue that even with the introduction of the 2000 peso bill, its actual value is not very high, so it may not solve the inconvenience of using banknotes. Accordingly, it is reported that the BCRA is also considering issuing a 5000 peso banknote.

Argentina is currently experiencing a severe economic crisis. Despite raising the benchmark interest rate nine times last year, from 38% to 75%, to combat soaring prices, the value of the peso continues to fall sharply. The country also replaced its Minister of Economy twice last summer.

The International Monetary Fund (IMF) approved a bailout package worth 6 billion dollars (about 7.4 trillion won) for Argentina in December last year.