Argentina Update – Banknotes & more –25th May 2023

th of May: 2023

Don’t be surprised if you see new banknotes this week. The 2,000 peso banknote was finally put into circulation, a much-needed measure as inflation forces the population to carry large piles of cash. Still, this new bill is only valued at four US dollars on the parallel market and 8.50 at the official rate, which means it’s still rather low for the largest denomination bill.

Instead of national animals, the new banknotes will feature Cecilia Grierson and Ramón Carrillo. The former was a physician who became the first woman to receive a Medical Degree in Argentina. The latter, the nation’s first Minister of Health, an Argentine neurosurgeon, neurobiologist, physician and academic.

Speaking of science, an Argentine biologist and researcher called Juan Pablo García Borboroglu received the 9th Indianapolis Prize on Tuesday the 16th for his work on penguin research and conservation. This award is considered the “Nobel Prize of nature conservation,” and was given to García Borboroglu for helping protect thirteen million hectares of penguin habitat through his organization, the Global Penguin Society.

He is currently an investigator at the National Council of Technological and Scientific Investigations, known as Conicet, and an associate professor at the University of Washington.

Back to the topic of banknotes and exchange rates, on Friday the 19th the Central Bank decided not to intervene in the financial currency exchange markets, which made the MEP dollar jump by almost seven percent in just one day. As a reminder, the MEP dollar rate is the result of acquiring bonds in pesos and then selling them in dollars. The Central Bank had been actively intervening in the bond market with international reserves to stop the surge, but decided to stop.

The decision not to intervene was made to dismantle a financial loophole that allowed brokers to earn up to nine percent “with just two clicks.” In other words, people can buy dollars at the MEP exchange rate and later sell them in the parallel market for a higher price than what they bought them just minutes prior.

On that note about bonds, the Economy Ministry secured some 750 billion pesos (or three billion dollars at the official exchange rate) in its bond auction last week, a good thing considering they were facing maturities of almost 600 billion pesos (2.5 billion dollars). The auction featured seven bonds and bills, including a new LELITE bond exclusive to mutual funds and various inflation-adjusted and dollar-linked bonds with different maturity dates. Another auction is scheduled for the 29th of May.

Since we’re talking about financial assets, a new resolution indicates that companies planning to merge with other companies, acquire other companies, or transfer their assets to other businesses have to provide exhaustive market analyses. The resolution is aimed at promoting and preserving competition, and the criteria to define the kind of paperwork that will be required is being established this week. This paperwork will include reports on how a merger would affect competition, the state of the market, and information on any offered products whose share exceeds fifty percent of the total supply in their market.

Meanwhile, there’s no competition for the Néstor Kirchner gas pipeline, which is finally completed. The 230-kilometer infrastructure is ready to start working on the 20th of June according to schedule, and is expected to save the country two billion dollars in the next six months.

On top of that, the oil company YPF has reactivated the trans-Andean oil pipeline, which allows Argentina to export oil to Chile. For the first time in seventeen years, Argentina will sell some 40,000 barrels a day to Chile for a daily income of 2 to 2.5 million dollars. The oil will be directly transported through the pipeline from the Vaca Muerta shale patch.

Initially, Argentina’s biggest oil union had threatened to go on strike. Fortunately, it was quickly resolved with a meeting between the union and private oil companies, which resulted in an agreement on increased safety measures for workers.

Also on the topic of unions, Pablo Moyano, the Truckers union’s number two, has quit almost every position he had. He’s the son of Hugo Moyano, the controversial leader of the union, and rumor has it his resignation stems from a bad relationship with his father and his father’s wife, who is also highly influential within the union.

In other news, the FIFA Under-20 World Cup began, and it’s taking place in Argentina. In an unexpected turn of events, FIFA had to change hosts at the last minute and decided to take it to Argentina, which meant the local team instantly qualified despite having been left out during the actual qualifiers. Maybe the team will have better luck this time, as they already won the first two matches of the tournament.

But regardless of how the team performs, we’re still wondering if this will be positive for the country. Just two days before the start of the tournament, the government created an exceptional one-off exchange rate for imports. Although the Central Bank is experiencing a shortage of foreign currency, they placed fifty million dollars at the disposal of the twenty-three visiting teams. They will enjoy tax-free imports of sporting equipment, media and press coverage, international communications, different commercial products, credentials, food and medicine.

Meanwhile, the national football team will be playing two friendlies next month, although none of those will be in Argentina. First, the World Champions will face Australia in Beijing on the 15th of June. And on the 19th, they’ll play against Indonesia in Jakarta.

From one type of entertainment to another, the British newspaper The Guardian published a great article titled “The rediscovery of Soda Stereo, Argentina’s biggest band.” The article covers the history of one of the most iconic bands in Latin rock history, but also its resurgence. Today, Soda Stereo’s music is reaching an international audience of non-Spanish speakers who were never exposed to the group when they were active decades ago.

Follow the link in the show notes to read the piece.

On a similar note, the Euronews channel covered an art intervention for World Recycling Day in Buenos Aires City. Last week, the lower part of the iconic Obelisk was covered with 30,000 plastic bags, an initiative by the Ministry of Public Space and Urban Hygiene to raise awareness about the importance of the three Rs: reduce, reuse and recycle. If you missed it, follow the second link in the show notes.

In other news, a film by the Argentine director Rodrigo Moreno premiered at Cannes on Thursday the 18th. Titled Los delincuentes, or The Delinquents, the film explores the dilemma between work and a more leisurely life, posing a simple question: would you rather spend a few years in prison or a lifetime clocking in at a company?

Maybe you’d rather be in politics. Speaking of which, we have a couple of election news before we go: this week, the government distributed more than 450 million pesos (about a million dollars at the official exchange rate) to political parties to finance their election campaigns. The Justicialist or Peronist party, the center-right opposition PRO and the Radicals were the main beneficiaries.

In the City, Mayor Horacio Rodríguez Larreta appeared with his two mayoral hopefuls, Ministers Fernán Quirós and Jorge Macri. He also agreed with his internal rival Patricia Bullrich on a single PRO candidate in the City

As for the Libertarians, Javier Milei was harshly criticized after confirming that El Dipy, a singer in the cumbia music genre, will be his candidate for mayor in the district of La Matanza—one of the most populous areas in the Buenos Aires Province.

Aaaaand that’s it for this week! We want to hear from you! Write to us at argentina@rorshok.com

¡Nos vemos la próxima semana!