Economy, Currency and Banking
peso moneda nacional, centavos, national bank, pesos, Argentine peso
Formerly, Argentina’s monetary system was based on the peso oro (Spanish “gold peso”), although no gold coins actually circulated. The peso moneda nacional (called the paper peso and consisting of 100 centavos) was the currency in use. Rampant inflation in the 1970s and early 1980s rapidly depreciated the value of the peso, and in June 1985 a new currency, the austral (equal to 1,000 pesos), was introduced as part of an ambitious program to control inflation. When this failed, the nuevo peso argentino (equal to 10,000 australs) was introduced in January 1992, at an exchange rate of 1 peso equaling U.S.$1. However, the government’s decision to peg the peso to the U.S. dollar on a one-to-one basis came under significant criticism. Critics claimed that it added to Argentina’s economic problems in the late 1990s and early 2000s because it caused the peso to be overvalued. In January 2002 the government ended the practice of linking the value of the peso to the U.S. dollar. By mid-January 1 Argentine peso was trading for 71 U.S. cents.
The Central Bank, which was established in 1935 and came under government control in 1949, functions as the national bank and has the sole right to issue currency. In the mid-1980s, 30 other banks were government owned, and about 30 commercial banks were in the private sector operating on a national level.
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