>Since the exchange rate is ludicrously high (one dollar = one peso), >Argentina has been subsidizing systematically the imports and punishing >exports. This exchange rate was imposed in order to make it easier for >the Government to raise the dollars necessary for the payment of the >foreign debt.
this doesn't make sense. The high exchange rate implies a current account deficit that in turn leads to Argentina's external debts _increasing_. Strictly speaking, if A's goal is to pay off foreign debt, then exports should exceed imports. If the peso is devalued, the peso value of A's dollar-denominated debts would increase. Sounds like either inflation, default, or both would result. That might be a good thing. Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
