In 2022, many basic necessities could be purchased with the highest denomination ticket. But that is not possible anymore
By iProfessional
02/22/2023 – 2:02 p.m.
The Focus Market consultancy prepared a report where they surveyed 10 products that in 2022 they could buy -and in several cases without receiving change- with a 1,000 peso bill. In 2023, when buying the same products, it is verified that the same maximum denomination bill is no longer enough.
If in 2022 we bought a 3-liter sunflower oil or a 360-gram package of chicken batter with $1,000, they gave us change of $160 and $500, respectively. However, today to buy the same products we must have, apart from the full $1,000 bill, with $800 more to buy the oil and $200 more to buy the package of chicken batter.
“The loss of purchasing power of our currency is accelerating and the nominal value of the currency is at its lowest level since hyperinflation. Every time Argentines require more number of tickets to carry out the same buying mission”, said Damián Di Pace, director of Focus Market.
“In fact, a purchase that in 2022 was made with a $1,000 bill today requires 3 or 4 additional bills to be able to carry it out. There are several macro fundamentals since the current fiscal deficit is financed with monetary issuance and more debt placement in pesos in the market,” he added.
Then Di Pace pointed out that “it is generating more future uncertainty and at present the banknote loses confidence by increasing its speed of circulation. Argentines get rid of the peso at a greater speed despite the fact that the Government aspires to them with more debt placement,” he remarked the director of Focus Market”.
“There is data from the Argentine macroeconomic distortion that explains the deterioration in the micro. In 2023 the $1,000 bill is already the one with the highest issue and circulation in comparative terms to the rest. However, bank tellers are replaced 2 or 3 times a day, there are record sales of ticket counting machines for businesses and bank warehouses are not enough, which is why they are having to build or rent new spaces to store them,” said Di Pace.
Products that cannot be bought with $1,000
Below we can see that if in 2022 we bought an XL size diapers x 36 units or a 3-liter fabric softener sack with $1,000, and they gave us change of $228 and $480, respectively. However, today to buy the same products we must have, apart from the full $1,000 bill, with $780 more to buy diapers and $200 more to buy fabric softener.
“Without a doubt, not getting a new bill that compensates for the loss of purchasing power of the $1,000 bill since its birth in 2017 to date generates a cost, insecurity in its transfer and a problem for all Argentines. This new denomination should be a $10,000 bill but since at its launch it would already lose half of its real purchasing power, the issue should be accompanied by a $20,000 bill to anticipate the deterioration that it will have this year with inflation projected at 98% year-on-year for 2023,” explained the director of Focus Market. .
