How a broke Argentine province is countering Milei's deep austerity cuts
After entering office last year, far-right President Milei swiftly imposed his fiscal shock therapy, slashing federal budget transfers to provinces
LA RIOJA, Argentina — They look like cash, fit into wallets like cash and the governor promises they’ll be treated like cash.
But these brightly colored banknotes aren’t pesos, the depreciating national currency of Argentina, or U.S. dollars, everyone’s money of choice here.
They are chachos, a new emergency tender invented by the left-wing populist governor of La Rioja, a province in the country's northwest that went broke when far-right President Javier Milei slashed federal budget transfers to provinces as part of an unprecedented austerity program.
“Who would have imagined that one day I’d find myself wishing I’d gotten pesos?” said Lucia Vera, a music teacher emerging from a gymnasium packed with state workers waiting to get their monthly bonus of chachos worth 50,000 pesos (about $40).
Across La Rioja's capital, “Chachos accepted here” decals now appear on the windows of everything from chain supermarkets and gas stations to upscale restaurants and hair salons. The local government guarantees a 1-to-1 exchange rate with pesos, and accepts chachos for tax payments and utilities bills.
But there’s a catch. Chachos can’t be used outside La Rioja, and only registered businesses can swap chachos for pesos at a few government exchange points.
“I need real money,” said Adriana Parcas, a 22-year-old street vendor who pays her suppliers in pesos, after turning down two customers in a row who asked if they could buy her perfumes with chachos.
The bills bear the face of Ángel Vicente “Chacho” Peñaloza, the caudillo, or strongman, famed for defending La Rioja in a 19th-century
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