Reports have emerged that Argentina’s Central Bank has run out of US dollars. Because of this, the bank is allegedly resorting to customer deposits of USD to maintain operations. The nation is grappling with a skyrocketing inflation rate of 104%. It is believed that the high inflation rates have prompted the central bank to suspend operations for Monday. This marks the first time Argentina’s inflation rate has exceeded 100% since the end of hyperinflation in the early 1990s.
In February, Argentina’s inflation rate reached 102.5% according to the country’s statistics agency. As a consequence, the prices of many consumer goods have more than doubled since last year. Argentina has struggled with economic difficulties for years, and today a significant portion of its population lives in poverty.
BREAKING‼️🇦🇷 Reports emerging that Argentina’s Central Bank has run out of US dollars and started using customer deposits of USD.
– Inflation running hot at 104%
– It has suspended operations for Monday.
It’s happening… 🤨
— Radar🚨 (@RadarHits) April 22, 2023
The government has attempted to curb price increases by implementing caps on the prices of food and other essential products. However, the food and beverage sectors experienced the most dramatic recent surge. In just a few weeks, prices grew by 9.8%.
Argentinian media attributed this increase, in part, to a steep rise in meat prices. For your information, the price of meat soared by nearly 20% within a month. Ambito, a local news outlet, reported that unfavorable weather conditions severely impacted livestock and crops.
Argentina’s Inflation Rate Is Above 100%
While the inflation rate surpassing 100% is notable, the effects of soaring inflation are destroying Argentina. In September last year, protesters took to the streets demanding action against the escalating cost of living. In February, Argentina’s central bank announced the issuance of a new 2,000-peso banknote. This was seen as an attempt to somehow help the people amid the soaring prices.
Efforts to contain inflation have been ongoing for years. However, divisions within the country’s economic policy have slowed down progress. Last summer, three economy ministers were changed in just four weeks. This happened at a time when the nation’s economic crisis was worsening. Additionally, President Alberto Fernández and his deputy, Cristina Fernández de Kirchner, allegedly disagree on the best approach to address Argentina’s economic issues.
In December, the International Monetary Fund (IMF) approved an additional $6 billion in bailout funds for Argentina. This is part of a 30-month program. By the end, this program is expected to reach a total of $44 billion.
As Argentina grapples with an unprecedented inflation rate and a depleted supply of US dollars in its central bank, the nation’s economic future remains uncertain. The government is continuously attempting to control inflation and stabilize the economy. Nevertheless, most of the attempts have failed deliberately as Argentina is now asking for help from the outside.
Argentines Protest Against The IMF Because Of Inflation Rates
Protests have erupted in Argentina as the economic crisis worsens. The past few days have been filled with protests against the International Monetary Fund (IMF) and its role in the country’s ongoing economic crisis. As mentioned above, the country’s inflation rate is currently over 100%, making it hard for the citizens to live. The protesters argue that the IMF’s bailout programs and austerity measures have just made Argentina’s financial troubles bigger. According to them, this is leading to increased poverty and unemployment.
JUST IN: Argentines protest against IMF policies amid 104% inflation.
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— Bitcoin Magazine (@BitcoinMagazine) April 23, 2023
They believe that these policies benefit international creditors and the wealthy elite. Moreover, they believe that ordinary citizens bear the brunt of the current economic crisis in Argentina. Amid an uncertain future, many protesters are calling for a reevaluation of Argentina’s relationship with the IMF. This is the second major country where protests are going on because of financial reasons, with France being the first.