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Monday, January 10, 2011

Argentines endure ATM lines, inflation blamed.

* Bank customers protest cash shortages at ATMs
* Opposition says bigger bills needed due inflation
(Adds cabinet chief's comment)
By Luis Andres Henao
BUENOS AIRES, Jan 7 (Reuters) - Argentines faced long lines outside banks this week due to cash shortages at ATMs that critics say is linked to the government's refusal to recognize burgeoning inflation by printing larger bills.
Argentina has one of the world's highest annual inflation rates at more than 25 percent, according to private forecasts that more than double the rate reported by the government.
Producing banknotes in bigger denominations than 100 pesos, currently the biggest, would signal an acceptance of the soaring prices.
So while consumers are being forced to use more bills to pay for the same products, complaints of shortages have surged over the busy holiday period -- when demand for cash grows, especially in densely-populated Buenos Aires province.
"It's been tough for all of us to take out money," Carlos Fanjul, an opposition politician from the provincial capital of La Plata told Reuters. "You have to wait three or four hours at any cash machine and sometimes you can't even get cash."
The lack of banknotes even forced the central bank to ask Brazil's mint to issue more than 10 billion pesos.
A central bank spokesman said the Argentine mint has "technical limitations" to issue bills, linking the shortages to holiday demand. Cabinet Chief Anibal Fernandez said the scarcity of notes was being resolved.
"My understanding is that the issues should be resolved over the weekend," he told local television.
But some economic analysts say the cash shortage is directly linked to the rise in consumer prices.
"This is happening because the government doesn't want to come clean (on inflation) by printing a new bill," said Ramiro Castineira, an economist at the Econometrica consultancy.


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