Carlos Menem

Major Changes

Immediately after being elected, Menem announced major plans to open the economy. During his first presidency, his policies help the economy to grow and ensured and promised a period of prosperity. However, his second presidency showed how unsuccessful these policies were. Argentina entered a deep recession with no hopes.

First Presidency

Reforms

Convertibility Law

• Established a currency board. In 1991, the Argentine Congress passed the Convertibility Law, making "the peso fully convertible with the dollar at a fixed nominal exchange rate, with the domestic monetary base fully backed by the foreign exchange reserves of the Central Bank." 8 In essence, a currency board system restricts the government's ability to issue notes and coins without a full backup of foreign reserves. Domestic notes and coins are fully convertible into the reserve currency at the fixed rate. Under this law, the government's liabilities could not be financed by printing money. This reform helped to arrest the hyperinflation problem immediately.

Sources

Australian Goverment Department of Foreign Affairs and Trade

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Introduction | Dictatorship | Raúl Alfonsín | Fernando de la Rúa

Interim Presidents | Néstor Kirchner | Graphs | Final Analysis