Voices en Español

Argentina is a cool country but one of the things that drove me nuts when I was there was how nobody ever had any spare change. Coming from the U.S. where the “give a penny, take a penny” cup is common in many business establishments, it’s frustrating being in a place where no one -from the taxi drivers to the supermarket to the cafés to the locutorios- ever seems to be able to give you back change and the assumption is that it’s OK to round the final tab up. Turns out the problem is worse than I imagined.

Cristina Kirschner, Argentina’s President, announced last week that a new electronic transportation ticket will be introduced in the next 90 days to “alleviate a dire coin shortage and do away with the black market trade in small change,” reports the Associated Press.

A black market in small change?

According to Joe Keohane, an American journalist, the private bus companies in Buenos Aires operate money-exchanges as a side business where they charge a 3% fee to exchange paper money for coins. They can do this because the banks refuse to give people loose change when they try to swap bills for coins. This money-exchanging business has become so lucrative, writes Keohane, that it has attracted the notice of local gangsters eager to get a piece of the action. The mobsters charge commissions ranging between 5% to 10% to change paper money into coins.

Keohane describes the current situation in an article over at Slate.com:

Everywhere you look, there are signs reading, “NO HAY MONEDAS.” As a result, vendors here are more likely to decline to sell you something than to cough up any of their increasingly precious coins in change. I’ve tried to buy a 2-peso candy bar with a 5-peso note only to be refused, suggesting that the 2-peso sale is worth less to the vendor than the 1-peso coin he would be forced to give me in change. When my wife went to buy a 10-trip subway pass, which retails for 9 pesos, she offered a 20-peso note and received 12 pesos in bills as change. This is commonplace—a daily, if not hourly, occurrence. It’s taken for granted that the peso coin is more valuable than the 2-peso note…

The government accuses Argentines of hoarding coins, which is true, at least to some extent. When even the most insignificant purchase requires the same order of planning and precision as a long-range missile strike, you can hardly blame people for keeping a jar of monedas safe at home.

At the root of the problem is a simple equation of supply and demand. There just aren’t enough Argentine pesos and centavos available, reports the Associated Press. “There are about 125 coins per person in circulation in Argentina — well below the 1,000 coins per person circulating in the U.S., according to The United States Mint.”