Monday, January 21, 2008

Spare Change, Señor?

In Argentina's hyperinflationary past, its printing presses produced prodigious quantities of banknotes that lost their value almost as quickly as they went into circulation. Today, ironically, money supply problems are occurring at the opposite end of the spectrum: the government seems unable to mint enough coins.

Argentina's smallest banknote is for two pesos (the peso is worth about 3.1 per dollar); there are coins for five, ten, 25, and 50 centavos, and for one peso. Coins are essential for riding the bus in Buenos Aires (the basic fare is 90 centavos, payable in fare machines that do not take bills). Businesses from corner kiosks to restaurants and others are constantly reminding their customers to pay with exact change. Even toll collectors on cross-country highways may ask for exact change.

Today, when I went to get a photocopy enlargement of a map (90 centavos), the cashier pleaded with me to withdraw the two-peso note I offered him and pay with a peso coin. His business, he said, could use 500 pesos worth of change per day, but they're hard pressed to get 50 pesos worth from the bank. Fortunately, I still had sufficient coins to pay for the downtown bus I needed, but the shortages are getting critical.

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