Marvel! In just five years, Argentina's purchasing power of 10,000 pesos has been reduced to 500

Nansheng said in this life

2024-05-12 16:32Posted in Guangdong financial field creators

Argentina's central bank recently announced that a new large-denomination currency, the 10,000 peso banknote, has been officially put into circulation. Soon, more denominations of 20,000, 50,000 or even 100,000 pesos will be put on the market.

Argentina's central bank called it "a long-awaited move" because Argentina is facing a rapidly surging hyperinflation, which has led to a severe depreciation of the currency, prices continue to reach new highs, and it has to use paper money with larger denominations in daily life.

Before the new large peso was officially introduced to the market, the largest currency in Argentina was 2,000 pesos, and now it is 10,000 pesos. The unit of the new currency is "10,000", which looks very high, but is only equivalent to 11 US dollars.

This is still converted according to the official Argentine exchange rate, and if it is converted at the black market exchange rate, the value of the 10,000 pesos is only about a few dollars. Argentine merchants have called for faster printing of larger denominations of currency, as inflation is coming too fast and too violently.

Argentina is not an industrialized country and relies on imports for a large number of goods, which are often priced in reference to the US dollar. Under the influence of hyperinflation, under the influence of the continuous depreciation of the exchange rate, the currency of 10,000 pesos will soon become unsuitable.

Many Argentine residents are forced to carry more bulging wallets for micropayment transactions. In the event of a large transaction, they must carry a backpack of money. According to the media, the Argentine peso has "evaporated" 95% of its value in the last five years alone.

In other words, the purchasing power of 10,000 pesos today is roughly the same as 500 pesos five years ago. Inflation continues to soar, and it is expected that by the end of this year or early next year, the real purchasing power of the 10,000 pesos will fall to about 200 pesos.

The new currency, which China helped print

As mentioned above, Argentina is not an industrial country and is dependent on imports for a large number of industrial products. In fact, this is an overestimate, and they can't even print their own currency – the new 10,000 peso note, which was printed with the help of the banknote printing company of the Chinese state-owned unit.

Without the technology, capital, and talent to promote mobile payments, there is a high reliance on cash demand, and high inflation has led to a surge in demand for paper money. Argentina said it expects not only China to help print money, but also Spain to join in and expand the banknote.

According to the Argentine media, even if the 20,000 peso currency is not considered, and the 50,000 or 100,000 pesos that may be launched in the future, the number of banknotes with a denomination of 10,000 pesos alone will exceed 6 billion. With such a huge demand, many countries helped to print.

Milley's promise, so far, has failed

The failure of several Argentine presidents to address high inflation was a challenge for Milley during his campaign. He has repeatedly said that he wants to end the hyperinflation situation in Argentina, but alas: Milley announced that he would devalue the currency by half, that is, double the price of goods, shortly after taking office.

The situation is now that prices have more than doubled and inflation in Argentina is close to 300%. Milley's promise to stabilize the exchange rate with the dollar, or even to replace the national currency outright, has failed so far. He doesn't have the ability to raise a lot of dollars.

Milley has made many trips and met with the leaders of the United States, Britain, Israel and other countries, but has received no promises from them, namely, that Western countries have not promised to provide large amounts of foreign exchange to help the new Argentine government stabilize the value of the currency or replace the peso.

Oh, they remembered China, they remembered the currency swap agreement signed between the previous Argentine government and China. For such an important matter, Milley does not visit China in person, but often visits major Western cities in a private capacity on weekends. With such a nonsensical model, how can you expect to renew the agreement!

The Argentine people are very dissatisfied! Months of demonstrations, marches, and strikes have been held, with some hoping that Milley will step down, while others will make good on his previous promises to reduce inflation, expand employment, and improve the living standards of residents, rather than the opposite. This article is written by Nansheng, welcome to forward, comment, leave a message and share!

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