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Published in:
2006 | OriginalPaper | Chapter
Perspectives for a Monetary Union between Argentina and Brazil
Author : Fernando J. Cardim de Carvalho
Published in: New Issues in Regional Monetary Coordination
Publisher: Palgrave Macmillan UK
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Besides some vague references contained in some official documents, the possibility of having the Common Market of the South (Mercosur) extended to include a monetary union between the four country members, and particularly between Argentina and Brazil, was first raised by Carlos Menem, then president of Argentina, during his last year in office. After a few years of relatively rapid growth, Argentina was going through the first stages of the deep recession from which it only began to recover in 2003. Several imbalances plagued the Argentine economy by the end of the 1990s, but the abandonment by Brazil of its semi-fixed exchange rate regime in January 1999, and the quick and steep devaluation of the real that followed it, dealt a lethal blow on the uno-a-uno exchange rate regime that Argentina had sustained since 1991.