Word: pesos
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Dates: during 1990-1999
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...this kind of populist blast--a picture painted by Limbaughs and cartoonists across the U.S. of a President extending a hand to Wall Street and ailing foreign countries--that convinced Clinton he had to bypass Congress altogether. With the Mexican peso sliding, only $3.5 billion left in Mexican currency reserves and financial markets throughout Latin America on the brink of collapse, the President last week invoked his executive authority to grant Mexico $20 billion in loans and loan guarantees as the centerpiece of a coordinated bailout. Following Washington's lead, the International Monetary Fund agreed to provide Mexico with...
...President Ernesto Zedillo Ponce de Leon still must reform the policies that caused the latest crisis--specifically, Mexico's reliance on foreign capital. Much of those funds fled in December when the government, unable to prop up the overvalued peso any longer, let the currency float. Now Zedillo is taking the politically risky steps of slashing government spending and jacking up interest rates to slow the economy and wean it from its dependence on ``hot money''--foreign investments in securities that can easily be dumped. Says Allen Sinai, the chief economist for Lehman Bros.: ``Mexico must swallow a recession...
...Under NAFTA the country accelerated its consumption of imported products ranging from shampoo to computers that drove thousands of inefficient domestic firms out of business. Now many Mexican companies can't find local replacements for foreign suppliers, whose prices have jumped as much as 50% since Zedillo devalued the peso...
...make matters more painful, the dismantling of government subsidies that saved firms a decade ago leaves today's companies unshielded from harm. Termoplasticos Inyectados, a small electrical-parts company, had been gradually winning back customers after losing them to imports for several years. But the collapse of the peso drove up the price of raw materials and brought the company's business to a standstill. ``Everything has stopped,'' says manager Ricardo Villanueva. ``If you ask me what I'm going to do, the answer is I just don't know...
...prosperity will have to do with less as a result of the cooling of investor ardor. Argentina, which like Mexico has an overvalued currency and carries substantial foreign debt, has watched $1.8 billion flee the country since the Mexican devaluation, despite firm promises by the government that the Argentine peso will not be devalued. Last year $11 billion flowed into Argentina in direct and indirect investment; this year the amount is expected to drop by as much as half. ``There is a crisis of confidence and some fears that Argentina might have trouble paying its debt,'' says Pablo Gerchunoff...