5 Centavos – Argentina

Argentina in 1983 stood at a fragile political and economic crossroads. The year marked the end of the brutal military dictatorship and the return to democracy with the election of Raúl Alfonsín. However, the economic legacy of the Proceso regime was catastrophic: a massive foreign debt burden, a collapsed industrial base, and, most viscerally for the population, hyperinflation. The currency, the peso argentino (introduced in 1983 itself to replace the previous peso ley), was in a state of rapid erosion. Inflation soared to over 400% annually, destroying savings and wages, while a complex system of multiple exchange rates created a vast black market for US dollars, known as the "dólar blue."

This monetary chaos was fueled by profound fiscal imbalances. The state financed its enormous deficits simply by printing money, as tax collection was weak and the costs of the state apparatus and the Falklands War were immense. Successive failed stabilization plans, including a pre-election package by the outgoing regime, relied on price freezes and wage controls that provided only temporary relief. The public's confidence in the peso was utterly shattered, leading to a frantic "flight to dollars" as the only perceived store of value. This dollarization of savings further weakened the domestic currency, creating a vicious cycle of devaluation and inflation.

Consequently, as Alfonsín prepared to take office in December 1983, the currency situation was the central economic emergency. The peso argentino was not functioning as a reliable unit of account, store of value, or medium of exchange for large transactions. This environment set the stage for the turbulent economic years of the Alfonsín administration, which would see the launch of the Austral Plan in 1985—another currency change in a desperate attempt to break inflationary psychology. The crisis of 1983 was thus the defining prelude to a decade-long battle with hyperinflation that would ultimately reshape Argentina's economic institutions.