The LECOP was a
bond
Bond or bonds may refer to:
Common meanings
* Bond (finance), a type of debt security
* Bail bond, a commercial third-party guarantor of surety bonds in the United States
* Fidelity bond, a type of insurance policy for employers
* Chemical bond, t ...
issued by
Argentine
Argentines, Argentinians or Argentineans are people from Argentina. This connection may be residential, legal, historical, or cultural. For most Argentines, several (or all) of these connections exist and are collectively the source of their ...
national government. ''LECOP'' (sometimes written as a common word, ''Lecop''), stands for Letra de Cancelación de Obligaciones Provinciales ("Letter of Cancellation of Provincial Obligations").
These bonds were circulated at a substantial discount from their face value, so anybody accepting was bound to experience
devaluation
In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national curre ...
(or
inflation
In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
). While LECOPs were intended as a means to replace legal currency (
Argentine pesos) at a time when cash was scarce, there were occasions in which LECOPs were not accepted as valid means of payment — most notably, most
tax
A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...
es could only be paid in pesos, or only partly paid in LECOPs. Public utility companies generally restricted the percentage acceptable to a 70-30 ratio, sometimes further limiting LECOP usage to 15% of the total bill.
Other
complementary currencies
A complementary currency is a currency or medium of exchange that is not necessarily a national currency, but that is thought of as supplementing or complementing national currencies. Complementary currencies are usually not legal tender and the ...
in Argentina at that time where the
Crédito
The Crédito was a local currency started on 1 May 1995 in Bernal, Argentina, at a garage sale, which was the first of many neighbourhood barter markets () and barter clubs () that emerged in Argentina during the 1998–2002 Argentine great depr ...
, the
Patacón and the
Argentino.
Currencies of Argentina
Bonds (finance)
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