Money or papers?: in Europe, Argentine banknotes are sold as souvenirs

In Europe, the peso is worth more as a souvenir than for its purchasing power.

It costs very little to find analogies and comparisons to determine the enormous loss in value of the Argentine currency. It is enough to remember that the peso, which had a “one to one” parity with the dollar until December 2001, today is worth less than a dollar cent. that is, already gave up more than 99% of its value in just over two decades.

The 1,000 peso bill, the one with the highest denomination in Argentina, from its first impression in November 2017 it went from being worth USD 57 to being worth only USD 8.47 in May 2022 if the official dollar is taken into account. And that same $1,000 is worth only $4.47 if the price of the dollar counted with liquidation (CCL) is considered.

The ridiculous value of weight Argentina brings unforeseen consequences. A group of officials specialized in transportation and electric mobility from different countries in the region were in Buenos Aires at the beginning of the month to participate in a technical workshop organized, among others, by the United Nations. One of the logistical recommendations made by that body foreign participants was that, once in the country, sell their dollars in the informal circuit to have pesos and be able to make your expenses. “It’s a scandal”acknowledged an official source in dialogue with Infobae.

In Barcelona, ​​Argentine banknotes are still legal tender for a value higher than the real one, according to their purchasing power

The curious recommendation was made through a document with the UN logo. It is the typical text for international missions and meetings of this type, in which the United Nations gives foreign officials some recommendations on how to get around in the city where the event takes place. In the case of Buenos Aires, the use and management of the exchange rate is a challenge for visitors from abroad.

Another example of this derisory situation of the peso came in the last few hours from Europe. Journalist Sebastian Dumont revealed through his Twitter account that in a souvenir shop in Barcelona, ​​Spain, he sells the Argentine banknotes at 50 euro cents.

The saddest, and funniest at the same time, is that the Argentine banknotes offered are still legal tender in the country. And they even provide the opportunity to do a retail business. It happens that the 20 pesos bills are paid the same as those of 50 and 100 pesos. The equivalence with the euro is €0.16; €0.40 and €0.80 at the official exchange rate, respectively. But at the “blue” price ($233 per euro) it is reduced to €0.09; €0.21 and €0.42.

Therefore, by getting the banknotes at face value and reselling them at 50 euro cents, it allows win 41 euro cents for the 20 peso billup to 8 euro cents with the resale of the 100 pesos.

Due to an inflation that settles at 58% per year, more and more banknotes are needed to make the same purchases in cash on a day-to-day basis. The use of cash is still very high in Argentina, despite advances in the digitization of payments and bank transactions. So much so that during March of this year, $900 billion were withdrawn from the system’s ATMswhile the withdrawals over the counter in branches added another $600 billion, totaling a total withdrawal of $1.5 trillionaccording to a report from the Argentine Association of Banks (ADEBA).

According to the entity, the amount of cash delivered by banks in March is equivalent to 1.5 billion $1 billion billswith which they could be filled 1.5 Olympic swimming pools.

In accordance with Eugene Mari, chief economist of the Fundación Libertad y Progresothe loss of the value of the local currency is the consequence of a inconsistent economic policy. “In order to grow again, Argentina needs to lower inflation and for that, fiscal policy must be reviewed,” he reflected. And on this level, he added: “The current levels of public spending are not affordable and require monetary issuance without support that erodes the value of our currency.”

KEEP READING:

The UN advised its officials to sell their dollars in the blue market and even recommended the delivery of a “cave”
The free dollar rises and reaches $207, its highest value this month
Miguel Pesce responded to Javier Milei: “Central banks are necessary”
Markets: Argentine stocks and bonds take advantage of the strong price rebound on Wall Street
Banknotes and more banknotes: only in March the banks delivered 1.5 billion pesos in cash


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