Argentine peso

The Argentine peso (originally established as the nuevo peso argentino or peso convertible) is the currency of Argentina. Its ISO 4217 code is ARS, and the symbol used locally for it is $ (to avoid confusion, Argentines frequently use U$S to indicate U.S. dollars). It is divided into 100 centavos.

History

At the beginning of the 20th century, the Argentine peso was one of the most traded currencies in the world. However, throughout the century, the economy collapsed several times, and the country experienced periods of inflation and hyperinflation that led to changes in the system.

Peso, until 1826

The peso was a colonial currency equal to 8 Spanish reales (a silver coin). After the Independence, this currency continued in use until 1826.

Peso Fuerte, 1826–1881

The peso fuerte was a convertible currency, at $F 17 per Spanish gold ounce (27.0643 g) 0.916 fine. This was changed in 1864 when the rate was changed to $F 16 per gold ounce.

In 1854, the Argentine Confederation issued 1, 2 and 4 centavos coins, with 100 centavos = 1 peso = 8 reales.

Peso Moneda Corriente, 1826–1881

The peso moneda corriente ($m/c) was an inconvertible currency which started at par with the peso fuerte, but it was depreciated 25 times during its life.

Peso Oro Sellado, 1881–1929

The peso oro sellado was a convertible currency, and it was equal to 1.4516 grams of fine gold.

Peso Moneda Nacional, 1881–1969

The peso moneda nacional (m$n or $m/n) replaced the real at the rate of 8 reales = 1 peso fuerte = 25 pesos moneda corriente.

Peso Ley, 1970–1983

The peso ley 18.188 (called simply the peso ley), replaced the previous currency at a rate of one peso ley to 100 pesos moneda nacional.

Peso Argentino, 1983–1985

The peso argentino ($a), replaced the previous currency at a rate of one to ten thousand.

Austral, 1985–1991

The austral (₳, an uppercase A with an extra horizontal line), replaced the peso argentino at a rate of one austral for one thousand pesos.

Peso Convertible, 1991–present

The peso replaced the austral at a rate of one to ten thousand. It was also referred to as peso convertible since the international exchange rate was fixed by the Central Bank at one U.S. dollar to one peso, and for every peso convertible circulating, there was a U.S. dollar in the Central Bank's foreign currency reserves. However, after the economic debacle of 2001, the fixed exchange rate system was abandoned.

The end result was that one peso would be worth 10,000,000,000,000 (10¹³) pesos moneda nacional today.

Since January 2002, the exchange rate fluctuated, up to a peak of four pesos to one dollar (that is, a 75% devaluation). The exports boom then produced a massive inflow of dollars into the Argentine economy, which helped lower their price. On the other hand, the current administration has publicly acknowledged a strategy of keeping the exchange rate between 2.90 to 3.10 pesos per U.S. dollar, in order to maintain the competitiveness of exports and encourage import substitution by local industries. When necessary, the Central Bank emits pesos and buys dollars in the free market (sometimes large amounts, in the order of 10 to 100 million USD per day) to keep the dollar price from dropping, and had amassed over 27,000 million USD in reserves before the 9,810 million USD payment to the IMF in January 2006.

Note that the highest valued peso note is the AR$100, worth only about US$35. Prices in Argentina are lower than those in the United States in terms of purchasing power parity, so there is little need for higher valued notes.

Circulating Currency

Coins

Coins worth one peso and 50, 25, 10 and 5 centavos circulate. 1 centavo coins have been withdrawn from circulation.

Commemorating the National Constitutional Convention, two-peso and five-peso nickel coins were emitted in 1994.

Some two-peso coins were emitted in 1999 to commemorate the centennial of the birth of world-famous writer and poet Jorge Luis Borges; they had an image of Borges' face on one side, and a labyrinth and the Hebrew letter aleph on the other. In addition, commemorating the 50th anniversary of the death of Eva Perón, on September 18, 2002 a new two-peso coin with her face was created. It was said that this coin would replace the old AR$2 banknote if inflation continued to be high. None of the two-peso coins are currently in wide circulation.

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