Argentina facing scarcity of paper money

Buenos Aires, Jan 13 (IANS/EFE) Argentina is facing a huge scarcity of paper money as a result of which the country has outsourced a printing order for five billion pesos ($1.25 billion) worth of currency to neighbouring Brazil.

The central bank set up a special operation to distribute 100-peso bills on a priority basis to banks in the country’s most-populous provinces - Buenos Aires, Cordoba and Santa Fe.

This was in response to growing protests over the last few weeks in the main cities about the lack of 100-peso notes, the highest denomination in the country.

Central bank spokespersons said the delivery of the five billion pesos in 100-peso bills from Brazil is expected to be completed this week.

Economists and opposition politicians, however, said it was a lack of foresight on the part of President Cristina Fernandez’s administration that caused the currency shortage, which also complicated the payment of pensions and salaries.

Hernan Lacunza, a senior bank official, said the demand for paper money always grows by 15 percent at this time of year, due to summer vacations, Christmas festivities and the payment of Christmas bonuses.

Opposition politician Francisco de Narvaez said the lack of cash resulted from “a government manoeuvre to make people consume less” and thus slow inflation.

Argentine authorities have given no explanation about why the government currency office was not capable of supplying the currency notes or why the printing of the bills had to be outsourced to Brazil.

–IANS/EFE