Amid commercial claims and expectations for the creation of higher denomination banknotes, the new head of the Mint, Ángel Mario Elettore, should take office this Tuesday. Although not confirmed in the official agenda, the appointment was expected to become official following a meeting with Economy Minister Sergio Massa on Tuesday.
There is a change of authority in the official press in the midst of a loud rumor about issuing notes exceeding $1,000which currently does not equal US$3 measured at the MEP dollar exchange rate.
The decision on the banknote family is the responsibility of the Central Bank. The latest update dates back to May of last year, when it was anticipated that banknotes of higher value would not be issued. However, in Pesce’s circle they now recognize that it is possible to advance the creation of $2,000 and $5,000 bills.
At the request of the banks, the requests of some chambers of commerce have been added. Complaints are growing as inflation rises: with a 95% price increase in one year, the number of tickets has become unmanageable for many sectors of the economy.
This was demonstrated almost a year ago by a study by Adeba, the chamber that brings together the country’s private banks In just one month, more than $1.5 billion were withdrawn from banks.
Among the questions on the failure to update the family of banknotes are the costs: “During 2020, only the expenditure on materials for monetary issues amounted to 118 million dollars. To this must be added the costs of storage, transport and destruction of cash”, they underlined in the chamber of commerce on the basis of data reported by the BCRA itself.
But beyond the economic factors, the decision to expand the family of banknotes is purely political. As soon as he arrived at the Central Bank, Miguel Pesce tried, in the midst of the pandemic, to establish the need to create a $5,000 banknote. The idea was quickly scrapped: one sector of the governing coalition has refused to move forward ever since the introduction of “larger” banknotes was a way of accepting the loss of value of the coin.
However, and together with runaway inflation, the issue was always on the table. And in recent days the idea of taking it back has gained strength. The arrival of Eletorre, former finance minister of the province of Córdoba at the Casa de la Moneda, opens at least a glimmer of light.
In parallel, a Senator from Together for Change introduced a bill last week asking the nation state to advance the creation of $2,000, $5,000, $10,000 and $20,000 bills.
The Ministry of Economy preferred not to specify details on this possible decision. In any case, the initiative must come from the Central Administration Council itself, which, in practice, is the only client of the Casa de la Moneda and is the one who sets the country’s monetary policy.
In the case of tackling this type of project, times are long: sources with knowledge of the subject say so putting new newspapers on the street can take at least four or five months.
Source: Clarin
