Wednesday 28 September 2022

Could a New Currency Be the Solution to Argentina’s Never-Ending Inflation Problem?

The Argentine state monopoly on money was devised by the conservatives

Paying the bills


Diplomatic slip? President Chaves congratulates Italian political party

QCOSTARICA - Experts in international relations consider unconventional  Costa...

Costa Rica legislators reject global income tax

QCOSTARICA - The Treasury Affairs Legislative Committee rejected a...

Therapeutic abortion: how accessible is it for women in Costa Rica?

QCOSTARICA - In Costa Rica, therapeutic abortion is allowed...

Best Things To Do in Costa Rica

Stunning beaches, lush rainforests, mountains with waterfalls, and charming...

Retirement Calculator for Married Couples

The sooner you make a retirement plan, the better...

State of alert lowered due to decrease in the influence of hurricane IAN

QCOSTARICA - Costa Rica has decreased the state of...

Cuba legalizes gay marriage

Q24N - Cubans approved in a referendum with 66.87%...

Dollar Exchange

¢636.31 Buy

¢641.26 Sell

28 September 2022 - At The Banks - BCCR

Paying the bills


Since its founding in 1935, inflation has averaged 55 percent per year. Since its issuance by the BCRA, 13 zeros have been added to national currency.

The Central Bank of Argentina has reaped nothing but failures throughout its history.

The Argentine state monopoly on money was devised by the conservatives, and, interestingly, those who opposed it were the socialists of the time, denouncing the Argentine state for converting the Central Bank into a source of financing and harming workers.

The last period of hyperinflation, which ended with President Raul Alfonsin, led to the premature assumption by President Carlos Menem that he could iron out the “convertibility law.” At that time — around 1991 — the Austral was replaced with the Peso at a rate of ten thousand to one. The new currency was exchangeable one to one with the US dollar. The impossibility of minting new currency ended with inflation, but as usual the underlying problem of the fiscal deficit had not been solved. The 2001 crisis ended with the 2002 devaluation. In 2003, President Néstor Kirchner took over. Today, the exchange rate is at 19 to one and the fiscal deficit remains the country’s underlying problem.

- Advertisement -

While the government is looking for alternatives to reduce public spending (many times without success, other times with small victories) economists Nicolás Cachanosky and Agustín Etchebarne have made a monetary proposal that again seeks to end the problem of inflation and the Central Bank’s access to the Argentine dollar.

They agreed that the country needs to create an exchange currency connected to the currency of Canada and Australia. The value of this new currency could be produced with an average obtained from half of the value of 1.5 currency. The proposal comes at an opportune time as it has been two years since President Mauricio Macri has struggled with the inflation problem.

Recently, federal officials acknowledged that they could not meet the inflation targets that had been set at the beginning of the year.

Agustín Etchebarne told the PanAm Post that a conversion was planned with these currencies given the similarities between their economies and Argentina’s.

“When there is a fall in the commodities of Canada and Australia, we see how devaluations occur that do not generate inflation,” the economist said.

According to Etchebarne, both Canada and Australia have a Common Wealth tradition from which “Argentina should never have departed”.

- Advertisement -
Paying the bills
Avatar photo
Q Costa Rica
Reports by QCR staff

Related Articles

Latin American migrants in the United States: a tool for political purposes?

Q REPORTS (DW) This week, the governor of the state of...

El Salvador: Twitter user prosecuted for contempt against Nayib Bukele

Q24N - A court in El Salvador moved to the investigation...

Subscribe to our stories

To be updated with all the latest news, offers and special announcements.