Coming To Mexico: Plastic Peso

When Mexicans have to pay a taxi driver or buy some tacos, they will likely start pulling out the plastic.

The country isn't going credit card crazy. It's just changing its 20 peso ($2) bill from paper to a form of plastic.

Bank of Mexico Governor Guillermo Ortiz announced the change during a news conference Monday, holding up a sample of the shiny blue bill that looks similar to the paper version but comes with a clear window that makes it difficult to counterfeit.

There are 130 million 20 peso bills in circulation, and they will slowly be replaced starting Sept. 30. Officials estimate it will take a year before the majority of paper bills are removed from Mexico's streets.

Besides being difficult to counterfeit, the plastic bills last up to four times longer than those of paper — although they cost 50 percent more to produce.

Mexico decided to start with the 20 peso note — its smallest denominated bill — because it gets the most use in Mexico. Ortiz said that if the plastic bill is successful, officials may convert the 50 ($5), 100 ($10), 200 ($20) and 500 ($50) peso bills, all of which are more likely to be counterfeited.

Australia began using plastic money in 1988. Some 20 countries — including New Zealand, Brazil, Thailand and Northern Ireland — have followed its lead.

Officials said the new plastic bills — which are paper-thin and the same size as their paper counterparts — have been tested successfully in automatic teller machines.

Also Monday, Ortiz said that Mexico's annualized inflation fell to around 5.3 percent in August from 5.5 percent in July. He added that inflation is expected to continue declining for the rest of the year, and that the central bank hopes to close December at its target of 4.5 percent.