Argentina Seeks IMF Aid to Save Peso

https://www.bloomberg.com/news/articles/2018-08-30/argentina-hikes-interest-rate-to-60-to-stem-peso-plunge

 

The article reports the deepening of Argentina’s currency crisis as an emergency interest-rate increase to 60 percent failed to stop jittery investors from pulling their money out of the country. This steep depreciation of Peso against Dollar has resulted from high Inflation rates , high Fiscal Deficit and Huge Government Borrowings.

 

The topics covered are determinants of Exchange Rate, Effects of Inflation and Interest rates on Exchange rates. Explain using the Exchange Rate diagrams.

 

Evaluation will include the short term and long term effects of depreciation on Current Account , Balance of payments , Exporters, Importers, Consumers, workers, domestic producers and Government.

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