[PDF] argentina crisis explained

The 2018–present Argentine monetary crisis is an ongoing severe devaluation of the Argentine peso, caused by high inflation and steep fall in the perceived value of the currency at the local level as it continually lost purchasing power, along with other domestic and international factors.
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  • What is the main reason for the Argentina crisis?

    High interest made it costly for businesses to expand using credit and contributed to the recession.
    The government's failure to take effective measures to end the recession created a crisis of confidence in government debt, because a shrinking economy meant a shrinking base of tax revenue from which to pay the debt.

  • What is the Argentina crisis?

    In fact, since 2001, Argentina has defaulted on its international sovereign debt three times –the first time in December 2001 in the midst of a very serious financial crisis, in 2014, in the middle of a battle against holdout creditors and again in 2020, in the middle of the COVID-19 pandemic.

  • What caused the 2001 Argentina crisis?

    The trigger for the crisis in Argentina was a run on the banking system as people realized that there were not enough dollars in the system to cover all the deposits .
    As the run intensified, the Argentine government was forced to introduce a so-called “fence” to control the outflow of deposits .

  • What caused the 2001 Argentina crisis?

    The lesson of the Argentine crisis is that institutional weaknesses that are deeply rooted in the political system are very difficult to change, and that the role of an ex- ternal agent, such as the IMF, in the reform process is unclear.

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