(April 15, 2016) President Barack Obama has had a remarkable series of foreign policy triumphs over the last 12 months. One of the lesser-known was the passage of legislation for reform of the IMF on December 18, 2015, after five years of obstruction by the US Congress.
(4/16/2015) The possibility of devaluation is apparently an issue in the upcoming Argentine elections. (The forward rate for next year is about 13 pesos per dollar, which is close to the informal rate and suggests a big devaluation relative to the current official exchange rate of 8.) In this connection, an Argentine newspaper has asked me about “Contractionary Currency Crashes,” a paper that I presented as the 5th Mundell-Fleming Lecture of the IMF’s Annual Research Conference.
U.S. federal courts have ruled that Argentina is prohibited from making payments to fulfill 2005 and 2010 agreements with its creditors to restructure its debt, so long as it is not also paying a few creditors that have all along been holdouts from those agreements. The judgment is likely to stick, because the judge (Thomas Griesa, in New York) told American banks on June 27 that it would be illegal for them to transfer Argentina’s payments to the 92 per cent of creditors who agreed to be restructured and because the US Supreme Court in June declined to review the lower court rulings.