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Montevideo, May 18th 2024 - 07:37 UTC

 

 

Argentine province to have its own currency

Thursday, January 18th 2024 - 10:34 UTC
Full article 6 comments
“The [federal] Government forces us to do this because of the cruelty of the adjustment,” Quintela said “The [federal] Government forces us to do this because of the cruelty of the adjustment,” Quintela said

The Argentine province of La Rioja's legislature Wednesday approved the issuance of a quasi-monetary unit to pay the public workers' salaries as budgetary restrictions from the federal government begin to be felt.

Peronist Governor Ricardo Quintela submitted the bill to create the so-called Bono de Cancelación de Deuda (BOCADE), which will be known among users as “Chacho” after slain caudillo Ángel Vicente Peñaloza.

“It is a debt cancellation bond, which is going to be debated today, possibly sanctioned on the day of the date, and which authorizes the issuance of a series of salary cancellation bonds”, Quintela explained upon sending the bill.

The province will start by issuing AR$ 15 billion worth of chachos (some US$ 18,322,300 at the official exchange rate). It remains to be determined whether there will be actual chachos printed or if they will only consist of digital entries into the workers' bank accounts. Chachos will be legal tender within the province.

“The [federal] Government forces us to do this because of the cruelty of the adjustment,” Quintela said.

“To think that during the election campaign, I was treated as crazy for postulating a system in which there was free currency competition, and now they are promoting it!” President Javier Milei wrote on X from Davos, Switzerland, where he was attending the World Economic Forum gathering.

“Welcome the provincial currencies to the competition, which, I would like to point out, unlike what happened in the past, will in no way be rescued by the national government,” he added. “The nation had to face the correction of a deficit of 15% of GDP, while all the provinces together add up to 1% of GDP,” Milei also posted. “With such an advantage, unless they are very bad, they should be quoted far above par,” he said.

As per Argentina's Constitution, only the federal government may issue money. However, similar measures were adopted by numerous provinces during the 2002 crisis, claiming chachos or patacones (the unit used then by the Province of Buenos Aires) were not money but bonds.

Quintela replied in a radio interview that La Rioja never asked the national government to rescue its bonds.

Peñaloza (1798–1863) -a.k.a. “El Chacho”- was one of the last caudillos to revolt against the centralism of Buenos Aires. In November 1863 after a military defeat, he surrendered to Major Pablo Irrazábal, who killed him with his spear and ordered his soldiers to fill the body with bullets. His head was cut off and nailed to the top of a post at a square in the presence of his family. His wife, Victoria Romero, was forced to sweep the main square of the city of San Juan in shackles.

Categories: Economy, Argentina.

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  • Chicureo

    Brasileiro

    Perhaps Milie's proposal of drastic cutting public service is the logical solution of Argentine problems.

    “The province will start by issuing AR$ 15 billion worth of ...... It remains to be determined whether there will be actual chachos printed or if they will only consist of digital entries into the workers' bank accounts. Chachos will be legal tender within the province.”

    This stupidity is why Argentines need to adopt the US Dollar as their legal currency.

    ¡Saludos de Panquehue!

    Jan 18th, 2024 - 11:55 am 0
  • Pugol-H

    Doubt that another ‘currency/bond' backed by nothing is going to help in Argentina, how many exchange rates do they have already? Worthless is still worthless.

    With a government actually controlling spending, a new approach in Argentina, everyone was always going to feel the pinch, but trying to get more money like this, by creating it out of thin air will never work.

    At some point they were always going to have to ‘bite the bullet’ and have more pain to get out of the current situation. A hard sell to people already suffering hardship.

    There is no silver bullet or magic wand to make a deficit this size just disappear, at some point it has to be paid off or defaulted and that has never worked or even helped in the past.

    And this is just the beginning.

    Jan 18th, 2024 - 02:16 pm 0
  • Chicureo

    Pugol

    This morning I attended a conference call with the Chilean Exporters Association.

    For the 2023 export report, they are certainly seeing that China's economy is in a severely depressed market, and avising careful caution regarding credit.

    China seems to be in an economic free-fall.

    ¡Saludos de Panquehue!

    Jan 18th, 2024 - 02:47 pm 0
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