Argentinian Peso

• Country: Argentina
• Currency: Peso
• Alias: Argentine Peso
• ISO 4217 CODES: ARS/032
• Symbol: $

The national currency of República Argentina has been amongst the most volatile in modern Western history, due primarily to numerous bouts of economic and political instability that have plagued the nation over several decades. Within a period of just 22 years in the 20th century, Argentina adopted no less than five different forms of national currency in attempts to salvage its economy. The Argentine peso saw some its darkest hours in late 2001 and early 2002, culminating in a near-total economic collapse. Thanks to major reforms and substantial international aid, recovery has been steady over the past few years, and today, the Argentine peso is helping the country to regain a solid footing on the global stage.

Background of the Argentina Peso

Beginning with the overthrow of the Peron administration in 1976, Argentina was governed by a military dictatorship for seven years that that mired the country in deepening debt. Argentina’s 1982 attempt to annex the Falkland Islands – long a British possession – further eroded international relations, and the return to a democratic form of government in 1983 was welcomed by most Argentinians. In spite of newfound stability under the administration of president Raúl Alfonsin, trade imbalances and inflation continued to grow. By 1989, the annual inflation rate had reached a staggering 3,000%.

From 1985 to 1991, Argentina’s unit of currency was the austral. The “nuevo peso” was introduced in 1991, with the intention of keeping its value pegged to U.S. dollar on a one-for-one basis in order to promote economic stability. Argentina’s economy fell into deep recession in 1999, and the International Monetary Fund helped to coordinate a $40 billion aid package for the country in late 2000. In spite of this assistance, Argentina soon defaulted on billions of dollars in foreign debt, and the government imposed severe restrictions on the ability for most citizens to access their bank deposits. The strategy of keeping the peso pegged to the dollar was abandoned, and in February of 2002, the peso became a free-floating currency, subsequently losing almost 60% of its value. As might be expected, this drop caused grave financial hardships for many Argentinians, who saw much of their life savings evaporate. The devaluation was a boon to foreign tourists, and this helped slightly to prop up the economy.

In spite of being a major producer of oil and natural gas in South America, Argentina experienced an energy crisis in 2004, posing a significant threat the peso. Fortunately, the creation of Enarsa – a state-owned energy company – has helped to stabilize the country’s energy industry and has taken charge of enacting long-term strategies to avoid further crises.

Most recently, Argentina’s government has expressed reservations over the country’s potential participation in a proposed “Free Trade Area of the Americas,” a proposed cooperative agreement between North, Central and South American nations dating back to 1995 which would ease tariffs and promote economic development. Argentinian President Nestor Kirchner has postulated that a free trade agreement could negatively affect both the value of the peso and the country’s agricultural industry. It remains to be seen whether the Free Trade Area agreement will be implemented before the end of the decade.

The peso is divided into 100 centavos. Denominations for coins are 1 centavo, 5 centavos, 10 centavos, 25 centavos, 50 centavos and 1 peso. Denominations for banknotes are 5 pesos, 10 pesos, 20 pesos, 50 pesos and 100 pesos.