Convertibility Plan (Argentina)
E681588
The Convertibility Plan was Argentina’s 1990s currency regime that pegged the peso to the U.S. dollar at a one-to-one rate in an effort to end hyperinflation, ultimately contributing to severe economic imbalances and the later financial crisis.
Observed surface forms (1)
| Surface form | Occurrences |
|---|---|
| Convertibility Plan (1 peso = 1 US dollar) | 1 |
Statements (47)
| Predicate | Object |
|---|---|
| instanceOf |
economic policy
ⓘ
exchange rate regime ⓘ |
| alsoKnownAs |
Convertibility Regime
NERFINISHED
ⓘ
Ley de Convertibilidad NERFINISHED ⓘ |
| associatedWithPolicy |
financial deregulation
ⓘ
privatization of state-owned enterprises ⓘ trade liberalization ⓘ |
| constraint |
limited lender-of-last-resort function of central bank
ⓘ
loss of exchange rate flexibility ⓘ |
| contributedTo |
current account deficits
ⓘ
economic vulnerability to external shocks ⓘ real exchange rate appreciation ⓘ rising external debt ⓘ |
| country | Argentina ⓘ |
| criticizedFor |
contributing to high unemployment
ⓘ
contributing to severe recession ⓘ contributing to social unrest ⓘ rigidity in responding to external shocks ⓘ |
| domesticCurrency | Argentine peso NERFINISHED ⓘ |
| endDate | 2002 ⓘ |
| endEvent |
abandonment of 1-to-1 peg in January 2002
ⓘ
devaluation of the Argentine peso in 2002 ⓘ |
| exchangeRatePeg | 1 Argentine peso = 1 U.S. dollar ⓘ |
| historicalSignificance |
case study in currency board sustainability
ⓘ
key example of fixed exchange rate crisis ⓘ |
| implementedBy | Central Bank of Argentina NERFINISHED ⓘ |
| inflationContextBefore | hyperinflation in late 1980s ⓘ |
| influencedBy |
currency board models in Estonia
ⓘ
currency board models in Hong Kong ⓘ |
| initialEffect |
macroeconomic stabilization
ⓘ
sharp reduction in inflation ⓘ surge in capital inflows ⓘ |
| introducedBy | Domingo Cavallo NERFINISHED ⓘ |
| introducedUnderGovernmentOf | Carlos Menem NERFINISHED ⓘ |
| legalBasis | Convertibility Law 23.928 NERFINISHED ⓘ |
| linkedCrisis | Argentine economic crisis of 2001–2002 NERFINISHED ⓘ |
| mainGoal |
end hyperinflation in Argentina
ⓘ
restore confidence in the Argentine currency ⓘ stabilize prices ⓘ |
| monetaryRule | full backing of monetary base with foreign reserves ⓘ |
| pegCurrency | United States dollar NERFINISHED ⓘ |
| policyType | hard exchange rate peg ⓘ |
| region | Latin America ⓘ |
| restrictedPolicy |
central bank financing of fiscal deficits
ⓘ
independent monetary policy ⓘ |
| startDate | 1991 ⓘ |
| supportedBy | International Monetary Fund NERFINISHED ⓘ |
Referenced by (2)
Full triples — surface form annotated when it differs from this entity's canonical label.
this entity surface form:
Convertibility Plan (1 peso = 1 US dollar)