INTRODUCTION: Argentina devalued the peso last week in an attempt to stabilise its economy and to make Argentinian exports more competitive.
GV People in street.
SV Newspaper stands and CU paper headlines.
SV PAN People outside finance house and exchange rates in windows and people taking note. (4 SHOTS)
SCU Sigaut speaking in Spanish.
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Background: INTRODUCTION: Argentina devalued the peso last week in an attempt to stabilise its economy and to make Argentinian exports more competitive. It was the first of the economic reforms promised by the country's new President, Roberto Viola, who became Head of State last Sunday.
SYNOPSIS: Argentina's economy is in decline and the devaluation has been widely forecast for some time. The previous government had been criticised for maintaining the peso at too high a value and thereby making exports dearer. A flood of domestic bankruptcies had added to the pressure on the new government to cut the value of the peso against all foreign currencies. However, a run on the peso has cost the nation an estimated two billion dollars -- about one third of its reserves -- and forced Argentina's interest rates up to more than 200 percent from around 100 percent in January. Over the past two years, the peso has been devalued by less than 100 percent, while retail prices in the country have risen by about 250 percent.
The new economics minister Senor Lorenzo Sigaut, announcing the devaluation, said the action would stem the run of the peso and bring down interest rates and thereby help Argentinian industry. The new value of the peso is about 3,100 to the dollar.