Argentina’s central bank is responding to escalating inflation by issuing new banknotes. 10,000 and 20,000 peso notes are to be put into circulation this year, as the monetary authorities announced on Thursday evening (local time). The largest banknote so far is the 2,000 peso note, which was only introduced last year. The reason for the central bank’s measure is the massive currency devaluation in the country. Consumer prices rose by more than 211 percent in December compared to the same month last year. This is the highest value since the early 1990s. From November to December alone, prices rose by more than 25 percent.
The new President Javier Milei, who has been in office for around a month, wants to reduce inflation with tough austerity measures. He himself admits that the situation will get worse before it gets better. Many Argentines are having to tighten their belts even more because of the sharp rise in prices. Two fifths already live in poverty. “Nothing is cheap,” complained 65-year-old pensioner Graciela Bravo, who is now carefully counting how many potatoes end up in her shopping basket. “We used to buy kilos, but now I buy three or four potatoes so they don’t spoil.” Lawyer Alejandro Grossi also has to save money. “I buy fewer things than I would like, so you adapt,” said the 49-year-old. “It’s like we’re used to it. It’s something so natural here: inflation and constantly changing prices.”
The right-wing populist and economist Milei, who describes himself as an anarcho-capitalist, announced a radical restructuring of his country during the election campaign. This should include, among other things, drastic spending cuts and the abolition of the national currency, the peso, in favor of a peg to the dollar. Milei is strongly opposed to abortion, supports looser gun laws and has repeatedly criticized the Argentine-born Pope Francis.