The reason why Argentina pegged its currency to the dollar Introduction: Pegging of currency means fixing the exchange rate between two currencies at parity. For example, pegging the Argentine peso with U.S. Dollar means the exchange rate shall be $1 = 1 Peso Given information: Argentina was the star of the Latin America in the 1990s, but it defaulted on public debts in early 2002, it was the largest public default by any country ever. The government tried many ways to fix the economic failure. The government also pegged Argentine peso with the dollar at parity for 10 years.

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Chapter 9, Problem 16MESP

Summary Introduction

To Determine:

The reason why Argentina pegged its currency to the dollar

Introduction:

Pegging of currency means fixing the exchange rate between two currencies at parity. For example, pegging the Argentine peso with U.S. Dollar means the exchange rate shall be $1 = 1 Peso

Given information:

Argentina was the star of the Latin America in the 1990s, but it defaulted on public debts in early 2002, it was the largest public default by any country ever. The government tried many ways to fix the economic failure. The government also pegged Argentine peso with the dollar at parity for 10 years.

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