Argentine Peso Crisis In 200 Words!
The Argentine peso is being devalued acutely since 2018, due to high tax rates & inflation, loss of purchasing power & foreign exchange reserves as well as various other domestic & international factors, as a result of which Argentina had to request a loan to International Monetary Fund (IMF).
As a shadow market for foreign exchange currency was formed by critical currency controls between 2011 & 2015 and trade revenue was tapered by plunging commodity prices, president Mauricio Macri enacted enticing & emphatic economic policies, despite which inflation remained high and the economic growth remained low.
As the value of peso carried on to plummet due to foreign investment decline and COVID-19 pandemic, the new president Alberto Fernandez reinstated the former president Cristina Kirchner's deprecatory economic policies, due to which underground foreign exchange markets emerged, inflation increased & poverty proliferated.
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