Nobody wants $100 bills. Nor those who receive them in the ATM automatic, nor their own banks. The ticket that at the time was the highest in Argentina today is barely enough for a few pills at the kiosk due to the high inflation and creates complications merchants y financial entities alike.
The rejection is so great that some banks began to charge commissions for depositing bills equal to or less than $200. For regulation of the Central Bank (BCRA), institutions can only charge companies, not individuals or MSMEs.
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Argentines have an affinity for cash. By informalitythe tax burden on digital transactions and for the difficulty that some businesses have to charge with plastic, the banknotes have Protagonism.
For him merchant, it saves you the costs of the transaction and the costs of having to wait to receive the payments in plastic. For the bankson the other hand, is a headache: they assure that handle so much number of bills makes operations much more expensivebecause every time a piece of paper enters the entities, controls must be carried out and manipulated so that it is settled in the system.
To that is added the cost of transporting them. According to industry sources, the cost of cash trucks today in Argentina is the second most important expense of banksbehind the wages of employees.
Cash: unsafe, expensive and unfriendly to the environment
This week, the Association of Argentine Banks (Adeba, which brings together entities with national capitals) published a technical note in which it requested measures to “reduce the use of cash.” According to the institution, cash is expensive for banks, insecure for who wears it and unfriendly to the environment. In 2020 alone, she consigned the work, the BCRA spent US$118 million in material expenses of the monetary issue.
In that technical note, Adeba specified that only in one month -March 2022- 1,500 tons of banknotes were withdrawn from banks and ATMsor the equivalent of an Olympic pool and a half full of papers.
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In dialogue with TNthe president of AdebaJavier Bolzicodetailed what are the solutions it expects from the Government and the Banco Central. On the one hand, create a tax policy in which there are not so many taxes for electronic payments.
On the other, he fought for the Central to enable the banks to be able to “reflect in their products the cost of handling cash”. In other words, that they can extend the collection of commissions not only to companies but also to MSMEs and individuals.
New banknotes, but with the same denomination
as far as he could tell TN, multiple entities are thinking of implementing similar measures to lower the cost of cash.
Other solutions requested by banks to reduce the operating costs of cash is issue banknotes of greater denomination, something that, for now, was ruled out by the authorities.
This Monday there will be a announcement of a new banknote family with images of heroes and the inclusion of more female figures, but the $1,000 bill will remain the highest denomination bill.
According to the latest data from the BCRA, there are about 7.2 billion banknotes, divided into:
- About 2.3 billion are $100 bills;
- The $500 ones are around 1.25 billion
- Those of $1000 add up to around 1749 million units.
In other words, the one that circulates the most today is one of the smallest denomination banknotes.
Due to inflation, a $6,000 bill would be needed
The economist María Castiglioni, partner ofe C&T Economic Advisorss, makes a calculation to understand the complication of the denomination of the banknotes.
Since The $1000 note was born, in December 2017, it lost 85% of its value, points out.
For upgrade purchasing power of that $1000 bill at today’s prices, it would be necessary to have a bill of $6044, Sum Castiglioni.
“The Government is reluctant to put higher value bills that would help reduce the amount of paper. The banks begin to charge these commissions because the cost of financial operations runs with inflation, so they are seeking to discourage these operations. Another curiosity is that the cost of making some coins exceeds the denomination of those coins”, concludes the economist.