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
* Chemical bond, the attraction of atoms, ions or molecules to form chemical ...
issued by
Argentine
Argentines (mistakenly translated Argentineans in the past; in Spanish (masculine) or (feminine)) are people identified with the country of Argentina. This connection may be residential, legal, historical or cultural. For most Argentines, s ...
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 curren ...
(or
inflation
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
). While LECOPs were intended as a means to replace legal currency (
Argentine peso
The peso (established as the ''peso convertible'') is the currency of Argentina, identified by the symbol $ preceding the amount in the same way as many countries using peso or dollar currencies. It is subdivided into 100 '' centavos''. Its ISO 4 ...
s) 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 compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
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 thei ...
in Argentina at that time where the
Crédito, the
Patacón and the
Argentino.
Currencies of Argentina
Bonds (finance)
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