Corralón was the informal name for the economic measures taken in

Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...

at the beginning of 2002 by President

Eduardo Duhalde Eduardo Alberto Duhalde (; born 5 October 1941) is an Argentine Peronist politician who served as the interim President of Argentina from January 2002 to May 2003. He also served as Vice President and Governor of Buenos Aires in the 1990s. B ...

during a bank run in which deposits and debt in dollars were exchanged to local currency at 1.4 per dollar for deposits and 1.0 for debt (this was also called ''pesificación asimétrica''). Previously, the withdrawal of dollars was limited to $250 per week. After the forced exchanged, people no longer had any dollars on the system and those who had savings in US dollars lost 65% of their deposited value.

History

Argentina's situation worsened for several months. The ''corralito'' was hardened during the interim rule of President

and turned into a ''corralón'' ("big corral"). The ''corralón'' differed from the ''corralito'' in that most deposits were forcibly exchanged for a series of

bond Bond or bonds may refer to: Common meanings * Bond (finance), a type of debt security * Bail bond, a commercial third-party guarantor of surety bonds in the United States * Chemical bond, the attraction of atoms, ions or molecules to form chemica ...

s denominated in pesos. The dollar-denominated accounts were automatically exchanged for pesos and peso bonds at a predetermined rate. The real necessity of such decision was questioned by several observers at the time, and some suggested this move benefited some large companies which were insolvent (or nearly so) whose owners had sent their dollars abroad before the ''corralito''; these owners were thus able to repay their companies' now devalued debts by converting much fewer dollars than it would have taken previously. The peso was first devalued (from 1.0 to 1.4 pesos/dollar) and then floated, thereby quickly depreciating to a maximum rate of nearly 4 pesos per dollar. Argentina's economy then gradually began a recovery from its abysmal state, spurred by exports that benefited from the heightened exchange rate, and by the declaration of default on most of its debt, which left the government with more money available to expand the economy."Becoming a serious country"
- Economist. Buenos Aires - Manifestación contra el Corralito - 20020206-22

Buenos Aires - Manifestación contra el Corralito - 20020206-22

Many private enterprises and also the

Province of Buenos Aires Buenos Aires (), officially the Buenos Aires Province (''Provincia de Buenos Aires'' ), is the largest and most populous Argentine province. It takes its name from the city of Buenos Aires, the capital of the country, which used to be part of th ...

were favoured by this measure as they managed to decrease their debts. Nine years later, several people had not yet been able to recover their savings because of the pace of justice in Argentina. However, debtors were able to purchase properties and other items by paying their debts at the 1 to 1 exchange rate.

History

References

See also