Malta airlifting 180 million peso banknotes to Argentina ahead of election

Malta will be airlifting 180 million banknotes to Argentina in the coming weeks, as the South American country finds itself unable to meet banknote demand ahead of the general election in October.

Argentina’s mint, Casa de la Moneda, cannot keep up with the Central Bank’s (BCRA) requests for new banknotes, and will start importing them from Paris and Malta.

BusinessToday quotes Bloomberg saying that in Malta, Swedish company Crane Currency is supplying 180 million banknotes.

Two tenders were issued by the Casa de la Moneda for shipments from Malta and France.

France's Oberthur will print and deliver another 80 million banknotes.

Sources said there will be eight shipments in all from Malta.

Both tenders can be extended for a further two months by CMA, if necessary.

The money will be delivered to Argentina fully printed with all security features and cut to size.

Each batch of 1,000 banknotes is estimated to have a printing cost of $120 to $125.

Argentina will therefore be paying 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.

Lack of transparency

The tendering process for the bills has been criticised in Argentina, with many politicians citing a lack of transparency.

Government Cabinet Chief Agustín Rossi came under fire from legislators requesting details on the tendering process.

Rossi cited commercial confidentiality to avoid providing additional details.

He said that the BCRA pays the final price per finished banknote, since it contracts directly and solely with Casa de la Moneda Argentina (CMA).

“When it is impossible to meet the required quantity, BCRA 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 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.

This amount of Argentine pesos printed in three continents is a reflection of the acceleration of inflation in the country, which reached a record of 7.7% in March.

The government is also refusing to issue higher denomination bills, beyond the few 2,000-peso bills that will hit the streets this year.

Analysts attribute the BCRA's decision to seek additional suppliers for the printing of banknotes to the pressure being exerted by mayors and province leaders to put pesos back into the pockets of Argentians ahead of the general election.