ARGENTINA: THOUSANDS OF PEOPLE QUEUE TO BUY U.S. DOLLARS ON FIRST DAY OF FLOTATION OF THE PESO IN OVER A DECADE SPARK INFLATION FEARS
Record ID:
448967
ARGENTINA: THOUSANDS OF PEOPLE QUEUE TO BUY U.S. DOLLARS ON FIRST DAY OF FLOTATION OF THE PESO IN OVER A DECADE SPARK INFLATION FEARS
- Title: ARGENTINA: THOUSANDS OF PEOPLE QUEUE TO BUY U.S. DOLLARS ON FIRST DAY OF FLOTATION OF THE PESO IN OVER A DECADE SPARK INFLATION FEARS
- Date: 12th February 2002
- Summary: BUENOS AIRES, ARGENTINA (FEBRUARY 11, 2002) (REUTERS) 1. SLV PEOPLE WAITING OUTSIDE EXCHANGE HOUSES; SLV SECURITY FORCES IN STREETS; SCU BOARD SHOWING DOLLAR BUY AT TWO SELL AT TWO THIRTY (3 SHOTS) 0.16 2. SV PEOPLE WAITING OUTSIDE EXCHANGE HOUSES (2 SHOTS) 0.29 3. MV PEOPLE NEGOTIATING AT EXCHANGE HOUSE 0.33 4. SLV PEOPLE LINING UP TO EXCHANGE DOLLARS 0.37 5. MV MAN HOLDING A SIGN OFFERING TO STAND IN LINE FOR SOMEONE FOR FIVE DOLLARS; MV PEOPLE NEGOTIATING IN STREET; MV EMPLOYEE CONTROLLING ENTRANCE TO EXCHANGE HOUSE (5 SHOTS) 1.10 6. MV BUENOS AIRES RESIDENT, JULIO, AT EXCHANGE HOUSE 1.13 7. (SOUNDBITE) (Spanish) BUENOS AIRES RESIDENT, JULIO SAYING "They were the small savings that we had. We had them in dollars and we have no other option but to sell in order to continue paying the credit." 1.19 8. SOUNDBITE) (Spanish) BUENOS AIRES RESIDENT, ELBA, SAYING "It's not out of not being patriotic. It's to make sure we keep what we have, the little that we have saved throughout our working life and now there's no work." 1.27 9. LAS TILT DOWN PROTESTERS FROM THE METALLURGICAL WORKERS UNION IN FRONT OF THE CENTRAL BANK; MV PROTESTER HOLDING DUHALDE BOOK; MV PROTESTERS HOLDING POSTERS; MV PROTESTER DRESSED AS CHAINED NATION (4 SHOTS) 1.44 10. SLV PROTESTERS CHANTING AND MARCHING THROUGH STREETS; MV DRUMMERS; SLV PEDESTRIANS TRYING TO CROSS BLOCKED BRIDGE BY UNEMPLOYED WORKERS (8 SHOTS) 2.17 11. SLV MEETING WITH MINISTER OF THE INTERIOR, RODOLFO GABRIELLI Y, MINISTER OF PRODUCTION, SLV/MV IGNACION DE MENDIGUREN WITH SUPERMARKET OWNERS AND PHARMACEUTICAL REPRESENTATIVES 2.23 12. SCU MINISTER OF THE INTERIOR, RODOLFO GABRIELLI 2.28 13. SCU MINISTER OF PRODUCTION, IGNACIO DE MENDIGUEREN 2.30 14. MV BUSINESS OWNERS 2.33 BUENOS AIRES, ARGENTINA (RECENT) (REUTERS) 15. SLV SUPERMARKET SCENES (3 SHOTS) 2.50 16. MV DRUGS ON SHELVES; MV PHARMACY SCENES (3 SHOTS) 3.00 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 27th February 2002 12:00
- Keywords:
- Location: BUENOS AIRES, ARGENTINA
- Country: Argentina
- Reuters ID: LVAT02CAH3KQ35UR65UCVX7VW4R
- Story Text: Thousands of sweat-soaked Argentines have been standing
in long queues to buy U.S. dollars and protect their savings
as the first day of the full flotation of the peso in over a
decade sparked fears of rampant inflation.
The hot, narrow streets of Buenos Aires' financial
district were blocked to horn sounding traffic on Monday
(February 11) by lines at foreign exchanges wrapping around
entire city blocks, even though the peso held steady and sold
near its recent levels of 2.0 to the dollar.
"They were the small savings that we had. We had them in
dollars and we have no other option but to sell in order to
continue paying the credit." said Julio one of the many in the
crowd.
The Central Bank stood ready to intervene, but there was
some respite for a country which in recent weeks has both
devalued its peso currency and defaulted on $141 billion U.S.
dollars in public debt in a last-ditch effort to pull out of a
deep financial crisis that has neared total collapse.
Ordinary Argentines were taking no chances with their
dwindling cash as many still remember the hyperinflation of
the 1980s, when shops marked up products by the hour and wages
could not keep up.
"It's not out of not being patriotic," said Elba, another
peso seller, "it's to make sure we keep what we have, the
little that we have saved throughout our working life and now
there's no work."
The peso weakened to 2.30 in early trade, but recovered to
1.95, stronger than the rate seen before trade was suspended
for a week to prepare for the total flotation.
Markets and investors worldwide watched for signs of
further trauma in Argentina, which briefly had a fixed rate of
1.40 pesos per dollar for exports alongside a floating rate,
as a first stage in breaking with the decade-long 1-to-1
peso-dollar peg.
Exchange rate forecasts have ranged from just over 2 to
the dollar to as much as 5 in the next few months -- shocking
numbers for a population used to a currency unit on par with
the dollar since 1991.
Argentines also had grown accustomed to zero inflation.
The country's 36 million people have reacted with indignation
to price rises that come on top of restrictions on cash
withdrawals to stem a run on the banks that saw a quarter of
deposits flee in 2001.
From Mar del Plata on the Atlantic to Mendoza in the
Andes, savers bashed pots and pans outside banks in noisy
protests, mobilizing what was once Latin America's most stable
middle class.
Thousands of unemployed blocked key routes into Buenos
Aires, demanding jobs in the kind of disruption that has
become routine in a country that has swiftly turned from a
model of economic and political reform in the 1990s to a
tinderbox.
Government officials are keenly aware that hyperinflation
could easily spark new riots, like those in December which
brought the resignation of President Fernando de la Rua as
well as his immediate successor chosen by Congress.
Imported goods have seen sharp price rises since the peso
was devalued, but so too have some home-grown goods whose
prices fixed in dollars on international commodity markets,
like Argentina's world-renowned beef and agricultural produce.
Government officials in charge of consumer rights and
regulating competition met with supermarket owners and
pharmaceutical companies on Monday to prevent abuse of the
situation and maintain fair prices.
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