The Central Bank of Argentina (BCRA) terminated its contract with the local Mint to print banknotes in denominations of 1,000 ($0.98) and 2,000 ($1.9) pesos, and instead the banknotes will be imported from China , reports La Nación. Production stopped on October 28 and employees working on these lines were furloughed. The decision was made due to the high cost of printing and the failure of the Mint to meet deadlines, the Argentine Central Bank explained to the publication.
During the last tender it turned out, La Nación points out, that there are many companies in the world that are ready to print banknotes; The competition was won by the Chinese state-owned company China Banknote Printing and Minting Corporation (CBPMC). Other companies are located in the US, Brazil, the United Kingdom and France. All offer printing at prices lower than those of the Argentine government mint.
Agreements have already been signed with the Chinese side on the issuance of banknotes for Argentina: in summer the first banknotes with a denomination of 10 thousand pesos arrived, in winter they are expected with a denomination of 20 thousand pesos.
Argentina has a difficult economic situation. Almost a year ago, in December 2023, the peso was devalued by 54%, the largest devaluation of the Argentine currency since 2002.
Inflation in August 2024 reached 236.7% year-on-year, the highest in the world. In September it was 209% and month-on-month price growth slowed to the lowest level in three years: 3.5%. Analysts expect inflation to fall to 124% by the end of the year. Experts polled by Reuters forecast GDP growth of 3.5% in 2025, after GDP fell by 1.6% in 2023 and an expected 3.7% in 2024.
The country is seeing a sharp rise in demand for the local currency, despite attempts by authorities to distribute the dollar. A drop in interest rates from a record 133% to 40% is driving demand for loans. One of the drivers of credit demand is the interest of Argentines in mortgages, which banks are offering again for the first time since 2018, RBC clarifies.
