With monetary policy for closed it is hard for authorities, Ask an Expert

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Q. It is currently arranging a loan from IMF and from or official lenders that will be biggest external bail-out since Brazil’s in January 1999. Rate of unemployment is 15%, wages are falling and output is stagnant. As for monetary stability, interest rates on Argentina’s bonds have lately been ten percentage points higher than US equivalent—reflecting not fears of a devaluation, but risk of default. Part of reason for this distress is that strong dollar has dragged peso to damaging heights; also, with monetary policy for closed, it is hard for authorities to stimulate demand. Interior design does this show that currency-board regime was a mistake?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9307463

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