Word: pesos
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...many Mexicans, the govern ment's drastic prescriptions seemed near ly as bad as the disease: the imposition of strict currency controls, an effective freeze on most dollar accounts, sharp price hikes and the second peso devalua tion in six months. Most was Silva Herzog's admission that Mexico was unable to meet current payments on its huge $80 billion foreign debt, among the highest in the Third World. The statement raised the specter of a possible default that would have a domino effect on the international banking system. No one was more concerned than U.S. bankers...
...public confidence waned, Mexicans began converting their national currency into dollars at a rate of up to 25 billion pesos a day. Increased capital flight prompted last February's 40% devaluation. But the government immediately undermined the measure with sharp wage hikes that fueled inflation and led to a new run on the peso. López Portillo, who had earlier vowed "to fight like a dog to defend the peso," was thus obliged to decree a second devaluation on Aug. 6. To complicate matters further, the government froze all foreign-currency bank accounts in Mexico, then announced last...
Dagnino Pastore's solution to Argentina's woes is complex. He devalued the peso, thus encouraging exports and making imports more expensive, and he proposed a program of low interest rates to help the country's manufacturers, whose businesses were failing last year at a rate six times as great as in 1977. To pacify Argentina's politically powerful public employees, he gave out pay hikes of between...
...desperation, Lopez Portillo devalued the peso in February. Then, victimized by his own indecisiveness and the pressures of the P.R.I.'s political machine, he was unable to hold firm on a wage freeze required to reap the anti-inflationary benefits of the devaluation. Within weeks, all government employees were given a 30% wage hike, and the government "recommended" that private-sector employers grant their workers increases of 10%, 20% or 30% "to restore purchasing power." In a single stroke, Lopez Portillo had wiped out most of the gains of the devaluation that had shaken his administration-and lost much...
...huge, five-house compound that the outgoing President is building for his family on a hill overlooking the capital. Cynics have labeled the complex the "dog hill," a reference "to a Lopez Portillo remark that he would "fight like a dog" to defend the shrinking value of the Mexican peso...