Carlos Menem

Major Changes

Immediately after being elected, Menem announced major plans to open the economy. During his first presidency, his policies were thought to help the economy to grow 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

• Convertibility Law

In 1991, he created a currency board that proposed the Convertibility Law, which was passed by the Congress. This law made the peso (Argentina currency) 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. Because of this new currency board system, the government couldn't issue notes without the full support of foreign reserves. Under this law, the government's liabilities could not be payed by printing money. This helped to solve 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