Argentine Peso Currency

Introduction

Argentine Peso means ‘weight’ in Spanish and is the national currencies of many countries such as Chile, Mexico, Argentina, Colombia, Uruguay, Dominican Republic, Philippines and Cuba. The currency code is ARS having numeric code 032 and is the most dominated currencies. Initially, this was named ‘Nuevo Peso Argentine’ as the convertible currency and is normally denoted by ‘$’.

Overview

Argentine Peso was once a highly traded currency, but after the toughest economic crises in 1999, the value depreciated to as 80%. However, the exchange rate of the currency is maintained around 4 pesos/dollar. Currently, argentine is maintaining high inflation rate, but the central bank is working to preserve the currency value and to protect the money functions. Argentina is the largest Spanish speaking nations and the eighth largest country by land area in the world. The US dollars are accepted widely here such that some provinces issue banknotes at par with Argentine Peso.

History

The Spanish empire currency was Peso and the country gained power with time and spread through various colonies and states making peso a popular currency in the world. Argentina became independent in 1816 and issued its currency denominated in soles, reales and escudos. Later after a decade, Argentine Peso came in two versions as convertible ‘Peso Fuerte’ and unconvertible ‘Peso Moneda Corriente’. After 1881, these were introduced as a single currency ‘Peso Moneda Nacional’.

This remained till 1969 and came with a new version in 1970 ‘Peso ley’ such that 1 peso ley was equal to 100 peso moneda nacional. In 1983, the democratic framework resulted in the new ‘Peso Argentino’ currency @ 1 peso argentino = 10000 peso ley. In 1985, it lost its value to 1 austral = 1000 pesos. In 1992, 1 peso = 1US dollar was stabilized, but 1999 was struck with economic crisis and the exchange rate was deserted such that Argentine Peso is derived depending on the market situations.

Existing market factors

The foreign exchange rates are volatile in nature based on various macro economic factors having different degrees of importance. Some market factors commanding the foreign exchange rate are

• The flow of capital between countries and the inflation rates
• Flow of exports and imports between countries
• Merchandise trade balance
• Short and long term interest rate differences
• Borrowings cost
• Fluctuation limits imposed by the governments of other countries