Where are Argentina's coins?

BUENOS AIRES — Think you’ve got cash problems? Just be glad you’re not in Argentina.

No one knows the inconveniences of the peso better than Buenos Aires’s convenience store owners. Walter Teich and his wife opened one right in the center of town three years ago. He’s seen a lot of coins come and go, but never so few as right now.

“There’s no coins, they don’t exist,” said Teich, standing next to a hand-written sign taped to the cash register telling his customers as much. “And it’s getting worse all the time.”

The coin scarcity has created a strange predicament: Merchants regularly refuse to sell their goods or services if it means they’ll have to give coins back as change. For small transactions, they’d rather lose the revenue than spare the change.

Teich, for example, won’t make a photocopy — and earn his 20 cents — for anyone who doesn’t offer exact change. He simply doesn’t have the coins, even after he and his wife make separate trips to the bank to buy the daily 20-peso coin ration that the government guarantees.

And even the guarantees don’t always work. Many of the banks are as loath to let go of their coins as the small businesses are. A spokesman for the Central Bank of Argentina says that 14 of the largest banks in the country have already been fined 10,000 pesos — about $2,700 each — for failing to change bills into coins. Advertisements can be seen all over the city promoting hotlines for complaints against banks.

The scarcity has prompted everyone to overvalue coins.

Black markets have reportedly cropped up for the resale of coins at more than 7 percent above their face value. And starting in June in Buenos Aires, more than half of the 3,200 members of the Chamber of Chinese Supermarkets (ubiquitous small groceries run by immigrants from China, not markets of Chinese food) will start issuing their own special bonds as change for purchases, worth 10 percent more than the coins they would otherwise give customers. The move is expected to cost the groceries less than the 450 to 600 pesos ($120 to $160) they spend weekly buying coins on the black market, according to chamber estimates.

The cause of the coin scarcity isn’t clear. The Central Bank says it’s supplying enough: a record 524 million new coins in 2008, up 13 percent from 2007. This year will likely bring a new record, and there are supposedly 5 billion Argentine coins currently in circulation — about 125 per person.

Many blame coin hoarders and black-marketeers, several of whom have been caught. But they seem to be effects, rather than causes, of the shortage. Another scapegoat is the city buses, which until now have only accepted coins. The role of buses may soon be seen, once a promised electronic card system takes effect. But history makes it hard to blame the buses too much: The city bus was introduced in Argentina almost a century ago, while the coin problem is new.

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