Argentina to introduce new currency in January

The cash-strapped government of Argentina yesterday said that the country would begin circulating a new currency in January in an attempt to revive the spent economy and keep a lid on social unrest.

The new currency, which will be called the argentino, will run alongside the peso and the US dollar.

Rodolfo Frigeri, the Secretary of Treasury, Finances and Public Revenues, said banks, many of which are short on dollars, would issue cash withdrawals of bank deposits in the new currency.

Introducing the new money is a way of injecting liquidity into an economy battered by nearly four years of recession without dismantling a hallowed law that pegs the peso's value at one-to-one with the dollar, he argued.

More immediately, it would put cash in the hands of the poorest Argentines, downtrodden by a four-year recession and a near record 18 per cent jobless rate.

The new government of President Adolfo Rodriguez Saa, formed by left-leaning members of the Peronist Party, is anxious to keep a lid on simmering discontent that last week erupted in looting and street riots, driving the former president Fernando de la Rua from office.

The argentino will be a government bond that can be used to "pay everything, from salaries to taxes, goods and services," said Mr Frigeri.