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High Anxiety about `Third Currency` of Argentina

Posted December. 27, 2001 09:32,   


The provisional government of Argentina that had announced to issue a third currency, `Argentino`, is facing severe criticisms from inside and outside the nation as well. Particularly, the Argentine people are worried about the confusion by the circulation of various currencies.

Former President Carlos Menem remarked, "The introduction of new currency is not appropriate since it would not change the situation of Argentine economy of which 80 percent is relied on the peso fixed to dollar." Such remarks of the president of the ruling party hint at the conflicts in the ruling circles.

BBC reported that the issue of new currency in Argentina, where over 2 million people are unemployed, has nothing but a symbolic effect. The Wall Street Journal also reported the negative responses of the investors.

Meanwhile, foreign presses reported that Argentines are confused by the additional issue of a new currency while various bonds issued by the central and local governments are being circulated like currencies.

Buenos Aires, which is the most populated state, issued one billion dollar of national bond `patacones` with one year limitation and Cordoba state also issued two types of bonds `recof` and `recor` to pay for the salaries, pensions, and expenditure for stationary.

The residents of Cordoba, who are using peso and dollar in addition to the provincial bonds, are worried about the future of the state bonds when the third currency, `Argentino` appears.

Sung-Kyu Kim kimsk@donga.com