It has been five years since Argentina’s unprecedented financial crisis, which caused significant structural changes after the peso’s devaluation, including the destruction of the financial system and of many economic institutions. Today, Argentina is in a transition stage, where key economic variables have not yet reached their long-term equilibrium levels, which has further implications for the conduct of monetary policy.
As our history shows, spasmodic growth cycles followed by crises are not harmless and have involved significant costs in terms of income. These fluctuations have had devastating results. Against this backdrop, the Central Bank of Argentina is building an automatic stabiliser through its policy of foreign-reserve accumulation, which provides more than $37bn of external liquidity and creates much-needed insurance to reduce external vulnerability.
