Submitted in part by ICBA Asia, Brazil, India and the USA via the IRC Read & Delete Monthly European countries are not the only ones facing a crisis of currency, credit and confidence these days.  Harkening back to its 2002 debt restructuring, Argentina has introduced new foreign exchange controls to bolster the peso.  The new regulations, which require a tax identification number and verification of funds, have shut down many of the country’s forex offices.  In its first days, The Economist estimates that the currency regime has denied 70% of legitimate hard currency transfers.  Uncertainty has driven investors from peso-denominated funds to expensive dollar-denominated government bonds. The peso has lost a third of its value since Christina Fernandez-Kirchner was elected president in 2007.   Even with her decidedely mixed economic performance, with recent re-election success (last month), she has clearly won an electoral mandate and her party has regained control of Congress.   Thanks largely to strong commodity prices, many Argentinians are, in real terms, much better off now than they were before her first election.  However, in the face of rampant inflation (estimated to be about 25% annually), a ballooning public spending tab, and $9 billion in debt outstanding to the Paris Club, the road ahead will not be easy.  The outcome

Read more…