For the second time this century, Argentina has gone to the International Monetary Fund (IMF) for help. President Mauricio Macri is reportedly negotiating an aid package from the fund that amounts to USD 30 billion. This occurs 17 years after South America’s second-largest country defaulted on its debt – and 12 years after severing its relations with the fund.
The worldwide trend of a U.S. Dollar valorization has hit emerging economies like Brazil, Turkey, and Colombia. But its heavy reliance on USD funding places Argentina in a particularly fragile position. The Argentine Peso (ARS) crashed to a new historic low this week, despite the decision taken by the country’s Central Bank to spend over USD 4 billion to attempt maintaining the value of its own currency.
Argentinians now find themselves in an all-too-familiar place: on the brink of a deep financial crisis.