Word: austral
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Dates: during 1990-1999
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...Argentina, where a free fall in the value of the austral threatened to raise inflation astronomically, the central bank was forced to intervene. The appointment by President Carlos Saul Menem of a new Economy Minister, Domingo Cavallo, appeared to restore investor confidence. By week's end the austral had been stabilized -- at a value of roughly 36% less against the dollar than a week earlier -- and investment funds rose 40%. But inflation remains such an endemic problem for the economies of both Argentina and Brazil that the prospect of last week's actions leading to real progress remained doubtful...
Economy Minister Antonio Erman Gonzalez called it "a week of economic terror." That was no exaggeration, even in a country where economic scare stories are all too common. Among the latest horrors: a sudden year-end collapse of the value of the austral, which plunged from 1,200 to the U.S. dollar to 2,000 before markets closed for the New Year, and price rises of as much as 100% as rumors circulated that the value of Argentina's national currency might be halved again. Shell-shocked citizens waited for Erman, the third Economy Minister since President Carlos Saul Menem...
...Erman declared a two-day bank holiday Jan. 2 and 3. By midweek thousands of people had gathered outside the country's bank branches, afraid that the value of their savings would evaporate. But as the value of the dollar sank to roughly the same level as before the austral's collapse, the dollar panic seemed to subside, and relieved retailers began rolling back their hasty price hikes...
...months the hyperinflation he inherited was subsiding. But in early December his program of wage-and-price strictures began to crumble. Interest rates on short-term bank deposits soared out of control, to 600% monthly. Nervous investors began to turn their assets into dollars, and the flight from the austral began in earnest...
Amid the uncertainty, a number of new reform proposals are being floated. One would replace the austral with the dollar, eliminating one major cause of inflation by depriving Menem's government of the ability to print money. For just that reason, not to mention outraged nationalistic sensibilities, the idea is sure to go nowhere...