What Happened to Argentina Currency in Recent Economic Crisis

Argentina's currency, the peso, has experienced significant fluctuations in recent years. The peso's value plummeted to an all-time low in 2018, with a 1 USD equivalent to over 43 ARS.

One of the main reasons for the peso's decline was the country's large trade deficit. Argentina's imports far exceeded its exports, resulting in a significant drain on the country's foreign currency reserves.

This led to a sharp devaluation of the peso, making imports more expensive and contributing to inflation. As a result, many Argentines saw their purchasing power decrease significantly.

The government's efforts to control inflation by implementing price controls ultimately backfired, leading to shortages of essential goods.

Argentina's Economic Measures took a drastic turn with the newly inaugurated administration of Javier Milei. The government devalued the peso by more than 50% as part of a package of large-scale spending cuts.

Milei's economic team, led by Luis Caputo, moved to weaken the official exchange rate to 800 pesos a dollar, a significant drop from the previous rate of 366.5 pesos a dollar. This decision was aimed at cutting the country's fiscal deficit and bringing down soaring triple-digit inflation.

Argentina's central bank is due to announce new monetary measures on Wednesday, following the devaluation. The central bank would target a monthly devaluation of 2%.

The economic team also canceled tenders for public works and cut energy subsidies as part of the austerity measures. The measures were welcomed by the International Monetary Fund (IMF), which described them as "bold" and said they would "help stabilise the economy and set the basis for more sustainable and private sector-led growth".

Argentina's economy is facing its worst crisis in decades, with an inflation rate nearing 150%, central bank reserves deep in the red, and two-fifths of the population in poverty. The country has an addiction to fiscal deficits, with 113 over the last 123 years.

The IMF has a $44bn loan with Argentina, and the country's foreign exchange and grains markets had been locked down on Tuesday as traders awaited the new government's economic plan.

Argentina has devalued its currency, the peso, by more than 50% as part of a package of large-scale spending cuts.

The peso is now worth 800 pesos to the dollar, down from 366.5 pesos to the dollar. This move is aimed at cutting the country's fiscal deficit and bringing down soaring triple digit inflation.

Argentina's economy minister, Luis Caputo, said the country needs to tackle a deep fiscal deficit of 5.5% of gross domestic product.

The country's inflation rate is nearing 150%, and central bank reserves are deep in the red. This is on top of two-fifths of the population living in poverty.

Argentina has a $44bn loan with the IMF, and the organization has welcomed the country's decision to devalue the peso. The IMF described the measures as "bold" and said they would "help stabilise the economy".

The devaluation was announced after the local markets closed on Tuesday, and the central bank will target a monthly devaluation of 2%. This move is part of a broader plan to reduce the country's addiction to fiscal deficits.