Economic history of Argentina assumed power, inflation was equivalent to an annual rate of 5000%, and output had declined sharply. In 1976, the era of import substitution was ended, and the government lowered import barriers, liberalized restrictions on foreign borrowing, and supported the peso against foreign currencies. That exposed the fact that domestic firms could not compete with foreign imports because of the overvalued currency and long-term structural problems. A financial reform was implemented that aimed both to liberalize capital markets and to link Argentina more effectively with the world capital market. After the relatively stable years of 1976 to 1978, fiscal deficits started
Currency crisis Currency crisis A currency crisis is a situation in which serious doubt exists as to whether a country's central bank has sufficient foreign exchange reserves to maintain the country's fixed exchange rate. The crisis is often accompanied by a speculative attack in the foreign exchange market. A currency crisis results from chronic balance of payments deficits, and thus is also called a balance of payments crisis. Often such a crisis culminates in a devaluation of the currency. A currency crisis is a type of financial crisis, and is often associated with a real economic crisis. A currency crisis raises the