The Argentine $ 1,000 banknote is the one with the lowest purchasing power in the region

In November 2017, when it was put into circulation the $ 1,000 note, the one with the current highest national denomination, was $ 60. Currently it is still the banknote with the highest denomination but its value is equal to eight dollars at the official exchange rate and, in the parallel market, less than four dollars, according to yesterday’s price.

Thinking about this loss of purchasing power of the orange “hornero” banknote due to inflation, the Economic Research Institute (IIE) of the Cordoba Stock Exchange a regional comparative analysis of the purchasing power of each country’s highest denomination banknote . He came to the conclusion that the Argentine is the one with the lowest purchasing power in dollars.

“The one thousand Argentine pesos is equivalent to less than half the purchasing power in dollars of the highest denomination banknote in Paraguay, a country that ranks second in the rankings, whose highest banknote buys about 15 dollars. In Venezuela, the highest denomination banknote is equivalent to US $ 18; in Chile, US $ 22; in Colombia, USD 23; in Brazil, 38 US dollars and in Mexico, Uruguay and Peru, the banknotes with the highest denomination exceed 50 US dollars ”, states the work.

To do this study, the goods were brought with them a uniform marketing format around the worldwhich allow comparisons to be made in a more direct and illustrative way than using price indices based on different consumer baskets.

For example, the comparison of the purchasing power of the highest denomination banknotes of each country was made on the basis of the values ​​(as of last June) of the combo of a multinational hamburger restaurant, which has the same format all over the world, and of a 330ml bottle from another global brand.

“With the highest denomination banknote 1.6 burger combos are bought in Argentina; At the other extreme is Peru, where you pay 11 combos with a 200 sun bill (seven times more than in Argentina). In Mexico, with 1,000 Mexican pesos you can buy eight combos (five more than the local ones). ” “Seven menus are bought in Brazil for 200 reais, four times more than in Argentina. Two thousand Uruguayan pesos are equivalent to five combos, the same as 100,000 Colombian pesos ”.

“The 20,000 Chilean pesos pays four combos; 100,000 guaraníes from Paraguay are enough for three and in Venezuela – it has one of the currencies with the lowest purchasing power in the region – 100 bolivars buy two combos ”. In Bolivia, it cannot be compared because there is no hamburger restaurant.

In case of soda, at the local market you can buy 8 bottles of 330 ml; in Peru, 80. In Mexico there are 56 bottles; in Brazil, 39; and in Colombia, 38 units. In Bolivia, 36 bottles are obtained with a 200 Bolivian bill; in Uruguay, 26 and in Chile, 20. In both Paraguay and Venezuela, whose currencies are second to the Argentine peso as well as those with the lowest purchasing power in the region, they are 17 and 16 respectively.

Finally, the study of economists points out that – from when it was created until today, the highest denomination banknote lost 87% of its dollar value at the official exchange rate and 93% in the free market.

“The rapid rise in prices and the erosion of the purchasing power of the local currency show that since 2017 in six of the countries analyzed (Bolivia, Chile, Colombia, Mexico, Paraguay and Peru), average annual inflation has been lower. at 5%, in Brazil it was 6% and in Uruguay 9%. For its part, Argentina had an average annual inflation of 47%, exceeded only by Venezuela (7321%) “.

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