Exclusive: Inflation-Hit Argentina to Import Banknotes from Europe Prior to Elections

The country’s mint, Casa de la Moneda, launched two tenders for the transportation of pesos from Europe, at a cost of millions of dollars

Photographer: Sarah Pabst/Bloomberg
April 18, 2023 | 05:44 PM

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Buenos Aires — Argentina’s Mint, Casa de la Moneda (CMA), cannot keep up with the central bank’s (BCRA) requests for new banknotes, and will start importing them from Paris and Malta, Bloomberg Línea can reveal.

The mint, which since this year is presided by Ángel Mario Elettore, launched a public tender for the shipment by air of more than 1,160 pallets of banknotes from the French capital and Malta during the next four months, which now join Spain, Brazil and China as suppliers of Argentine pesos.

Through public tenders N° 708 and 710, the CMA will seek, as from May 2, bidders to bring the banknotes either on charter or commercial flights.

From Paris there will be six shipments, in which 360 pallets of banknotes, with a total weight of 92,721 kilos, will be transported. From Malta, meanwhile, there will be eight shipments comprising 806 pallets of banknotes weighing 182,962 kilos. In both cases, the contract can be extended once only for another two months if the CMA so decides.

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New banknotes, costs and markets

A source with knowledge of the matter who asked not to be identified explained to Bloomberg Línea that, based on the measurements specified in the bids, the banknotes will arrive pre-printed, as, If they arrived as uncut sheets, the pallets would have other measurements, according to the source.

The source calculcated that the cargo from Paris would be equivalent to some 80 million banknotes, while another 180 million would arrive from Malta.

According to their estimates, each batch of 1,000 banknotes would have a printing cost of around $120 to $125, meaning that Argentina would have to pay between $31.2 million and $32.5 million for the bills, excluding air freight costs.


That puts each bill’s cost at around $0.12.

The banknotes coming from Paris and Malta, the source adds, are 1,000-peso denomination, which implies that 260 billion pesos will be shipped, with a cost that will depend on the exchange rate in the coming months, although it will not be less than 6.7 billion pesos ($31.2 million at the official wholesale exchange rate of 216 pesos to the US dollar).

The final amount, however, will also depend on shipping costs.

Behind the manufacture of the bills is French company Oberthur and in Malta, Swedish company Crane, which for centuries have supplied paper money to the US Federal Reserve for the manufacture of dollars.

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In the absence of bids or direct contracting with these firms, there is speculation that Spanish mint may be acting as a front for the operation.

The lack of transparency regarding the origin and cost of the banknotes imported by Argentina was reflected in the last management report presented by chief of cabinet Agustín Rossi at the end of March before Congress, and who avoided providing details on the matter in spite of two express requests from legislators.

In one of the answers, the official excused himself by stating that “the questions asked are covered by confidentiality clauses in the contracts with the BCRA ,and with the foreign mints that supply banknotes”.


He also stated that “the BCRA pays the final price per finished banknote, since it contracts directly and solely with Casa de la Moneda Argentina (CMA)”, and that the central bank, “when it is impossible to meet the required quantity, requests authorization to subcontract to money-printing companies abroad, such as Casa de Moneda de Brasil, the Fábrica Nacional de Moneda y Timbre de España, and China Banknote Printing and Minting Corporation”.

The bills feature the faces of Ramón Carrillo and Cecilia Grierson.dfd

Inflation and the demand for banknotes

The 260 million banknotes arriving from France and Malta will be added to the estimated 200 million that Argentina imports monthly from Spain, Brazil and China, and also to the more than 65 million banknotes produced each month on average by the CMA, whose annual production capacity amounts to 800 million banknotes.

All this mountain of Argentine pesos printed in three continents is a reflection of the acceleration of inflation in the country, which was a monthly record of 7.7% in March, and of the government’s refusal to issue higher denomination bills, beyond the few 2,000-peso bills that will hit the streets this year.

A second source with close ties to the dynamics of banknote printing said they are not surprised by the need of Casa de la Moneda to look for new printing centers, although they expressed surprise that the banknotes will come from France, a country which the source described as “expensive” in terms of banknote printing.


But regardless of this, the source indicated that this need to add pesos to the economy must be understood by the political context the country is going through.

According to their analysis, the last electoral results in Trelew and Neuquén, added to the current opinion polls and the social climate the country is experiencing, are generating a lot of pressure from mayors and provinces for the government to put pesos back into the pockets of Argentines, as it did in 2021 after the resounding defeat it suffered.

Given the proximity of the elections, the CMA is no longer able to produce more banknotes in time or to add a denomination higher than 2,000 pesos, the source added, saying this leaves the government with the need to accelerate the printing pace and to look for new suppliers with the capacity to provide pesos for the country.

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