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This assignment is about the crisis that affected Argentina in 2001 First of all we will try to understand how this crisis occured In a second part we will see the measures taken by the Argentinian government and will analyse of the results of those measures Then we will take a look at the interventions of the International Monetary Fund and their consequences To conclude we will analyse this crisis trying to determine what could have been done and what to learn from this economic disaster After its crisis at the end of the 1980s Argentina started to find the road to a good health on April 1rst 1991 when Carlos Menems government installed the convertibility system to fight against hyperinflation Under the Convertibility law the peso and the US dollar circulated at a 1 to 1 exchange rate The owner of a peso had a property right for a dollar and could freely convert this peso into a dollar The crisis of 2001 originated in a complex mix of problems that had been at work from the mid-1990s or even before The crisis also was the result of a weak financial systems that became too exposed to exchange rate risks as well as the large-scale capital inflows driven by cyclical downturns in the industrialized countries in the early 1990s To this can be added an excessive demand which rose asset prices fueled by strong credit expansions speculative and imprudent investment decisions weak or clumsy governance of companies and banks and a general lack of transparency in the public sector In concrete terms Argentinas economy went into recession in September 1998 as a consequence of the Asian and Russian currency crises which finished in a general decline in volumes of investment to emerging market economies The Brazilian currency crisis of 1999 led the economy into another blow When Fernando de la Ra became president in December 1999 things went from bad
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