Low bill

ON MARCH 26th Argentina’s president, Cristina Fernández de Kirchner, announced a new 100-peso note honouring the Mothers of the Plaza de Mayo, a group whose children were “disappeared” during Argentina’s military dictatorship. The colourful note got raucous applause from Ms Fernández’s clique. Others are less impressed. What the country needs, three private Argentine banking organisations argued in a letter to the Central Bank on April 1st, is not a new 100-peso note—the country now has three—but a more valuable one.

Over the past decade the peso has tumbled and inflation, the official statistics on which have been manipulated for years, has increased sixfold. Despite these drains on Argentines’ purchasing power, Ms Fernández has refused to allow a higher-value banknote. Today, 100 pesos buys a mere $11 at the official exchange rate. It fetches only $8 on the black market, which flourished after 2011 when Ms Fernández throttled foreign-currency dealings.

This erosion of the peso’s value means that banks must handle ever-growing volumes of cash. Their lobby groups complain this makes business unwieldy and unsafe. ATM machines are hard to keep stocked, since their capacities have remained the same even as the average withdrawal has increased from 380 pesos in 2008 to 1,500 pesos today.

Things are equally inconvenient for consumers, who tend to make even big purchases in cash. Some do so to shirk taxes. Others prefer to keep their savings stashed under mattresses and in freezer boxes than to make deposits in the banking system, which crashed during Argentina’s 2001 financial crisis. Properties, cars and big events such as weddings are commonly paid for with paper notes.

Such transactions, always cumbersome, are becoming ridiculous. Before the government stemmed access to foreign currencies, many big purchases were transacted in dollars, meaning a smaller pile of notes. Today, says Axel Brostrom, the boss of Binswanger Argentina, a property group, the volume of pesos needed to buy even a small apartment cannot be carried on foot. Many choose armoured trucks for safety. Once the vehicle arrives at the site of the sale, bricks of pesos are shuffled inside using duffel bags. Counting the cash can take up to four hours. For commercial deals it can take even longer.

Argentines will probably be counting their cash bundles for some time. With only eight months left in office, Ms Fernández is unlikely to allow a more valuable banknote. To do so would acknowledge that when it comes to inflation, she has long been counterfeiting the facts.