On Argentina's Currency Crisis of 2018
| Autor | Ramon Amadeo Castillo-Ponce, Kon Lai |
| Cargo | Professor, California State University, Los Angeles, Estados Unidos/Professor, California State University, Los Angeles, Estados Unidos |
| Páginas | 223-231 |
On Argentina’s Currency Crisis of 2018
Ramon Amadeo CastilloPonceaand Kon S. Laib
–Introduction. –I. Gross Economic Mismanagement. –II. Major Adverse Economic Shocks
–III. Confusing Policy Moves and Loss of Credibility. –IV. An Update for the First Half of
2019 –V. A Bumpy Ride Ahead
doi: 10.17533/udea.le.n92a08
Original manuscript received 19 June 2019; nal version accepted 5 September 2019
Introduction
Argentina painfully became the world’s riskiest sovereign borrower
behind Venezuela in 2018. Its national currency, the Argentine peso, lost
more than 50 % in value against the dollar in just the first 8 months of the
year, contributing to rising inflation and soaring interest rates. Argentina had
to ask for financial assistance from the International Monetary Fund (IMF),
and the country obtained a $50-billion bailout package in June, the biggest
loan in the IMF’s history. In addition to the IMF’s financing deal, Argentina’s
central bank jacked up its benchmark interest rate to 60 % — the highest
in the world — in late August in a struggle to fight galloping inflation and
stabilize the peso, which plunged to record lows.
Having rich natural resources and being one of the world’s major
agricultural producers, Argentina’s economy – the third largest in Latin
America – was supposed to be a high-income economy. How did Argentina
get itself into a crisis situation with rampant inflation and a collapsing
currency? Sadly, the crisis finds its root in the country’s prolonged severe
economic mismanagement.
aRamón Amadeo Castillo-Ponce: Professor, California State University, Los Angeles, Estados
Unidos. Email: rcastil@calstatela.edu. https://orcid.org/0000-0002-1091-2674
bKon S. Lai: Professor, California State University, Los Angeles, Estados Unidos.
Email: klai@calstatela.edu
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