Declining Confidence in Argentina's Currency

A sharp divergence between the official and black market rates of the Argentine peso this week worsened the country's ongoing economic turmoil. This gap and the peso's sharply declining value have undermined confidence in the currency.

The government now must figure out how to balance the competing needs of multiple sectors that all require some portion of the country's limited foreign currency reserves. New taxes, in addition to a range of moves undertaken since President Cristina Fernandez de Kirchner's re-election in October 2011, are meant to maintain high levels of government spending and bridge the gap until the country can return to being a major exporter of more than just agricultural goods.