Argentina Currency Devaluation Explained in Detail

Argentina's economy has been plagued by a series of currency devaluations, with the most recent one occurring in 2018. This devaluation led to a sharp decline in the value of the Argentine peso, making imports more expensive and inflation a major concern.

The value of the peso has been steadily declining since 2015, with a 50% drop in value against the US dollar over the past five years. This has had a significant impact on the country's trade deficit, which has been exacerbated by a decline in exports.

In 2018, the peso hit an all-time low against the US dollar, with some reports suggesting a value as low as 45 pesos to the dollar. This led to widespread panic among Argentines, who saw their savings and investments rapidly lose value.

Argentina's inflation rate has also been a major concern, with some estimates suggesting it reached as high as 30% in 2019. This has made it increasingly difficult for Argentines to afford basic necessities, let alone enjoy any discretionary income.

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The Argentine Peso was the national currency of Argentina from 1983 to 1985. It was introduced in June 1983.

The Argentine Peso replaced the peso ley at an exchange rate of 1 ARP per 10,000 peso ley. Users of the currency would prefix monetary values with the symbol "$a."

The Argentine Peso was divided into 100 subunits called centavos. Coins came in denominations of 1, 5, 10, and 50 pesos.

Initially, the Argentine Peso had banknotes denominated in units of one, five, 10, 50, and 100 pesos. Additional banknotes with values of 500 and 5,000 pesos were introduced in 1984.

The Argentine Peso was replaced by the Argentine austral in 1985, which was later replaced by the current national currency of Argentina, the Argentinian Nuevo peso (ARS), in 1992.

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The Argentine peso has a long and tumultuous history. It was introduced in June 1983 and discontinued in 1985 due to hyperinflation and currency devaluation.

The peso was replaced by the austral, which was first circulated in 1985 and lasted until 1992. This was then followed by the current national currency of Argentina, the Argentinian nuevo peso (ARS).

Argentina has a history of currency reforms, with periods of extreme devaluation and runaway hyperinflation. This has led to the country's currency being replaced several times in recent history.

The peso has undergone many transformations, with the peso fuerte (ARF) being introduced in 1826 as the first convertible paper money. This was followed by the peso moneda nacional, which was introduced in 1881 and initially minted with silver.

Here's a brief timeline of the Argentine peso's transformations:

The peso's value has fluctuated greatly over the years, with the current government announcing plans to devalue the currency by more than 50% against the US dollar. This is part of the "economic shock therapy" aimed at fixing Argentina's worst crisis in decades.

Argentina's new government is taking bold steps to address the country's economic crisis. The plans include a significant devaluation of the peso, with the exchange rate being cut to 800 pesos to the US dollar, from roughly 391 pesos.

The government is also cutting public spending, including reducing fuel and transport subsidies and freezing spending on some major government contracts and advertising. This is part of the "economic shock therapy" that President Javier Milei says the country needs to fix its worst crisis in decades.

The measures aim to tackle a deep fiscal deficit, which the economy minister, Luis Caputo, puts at 5.5% of gross domestic product. Argentina has an "addiction" to fiscal deficits, with 113 over the last 123 years.

The devaluation is expected to be painful in the short-term, but the government hopes it will help bring down soaring triple-digit inflation. Argentina's inflation rate is nearing 150%, and the country is struggling with low cash reserves and high government debt.

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The International Monetary Fund (IMF) has welcomed the measures, calling them "bold" and saying they will "help stabilise the economy and set the basis for more sustainable and private sector-led growth". The IMF has a $44bn (£35bn) loan with Argentina.

Here are the key economic measures announced by the government: