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Inflation in Argentina: Battling Soaring Prices in the Land of Peso

By ⚡ Daniela ⚡ | Me and Bitcoin | 18 May 2023


In an attempt to address the skyrocketing inflation, the Central Bank of Argentina increased its key interest rate by six percentage points to 97% at the beginning of the week. The country is facing a unique challenge, as the annual inflation rate surpassed 100% last month, posing a significant issue that central banks worldwide are grappling with in their efforts to curb inflation.

 

Venezuela, Zimbabwe, and Argentina Lead the Way

Inflation in Argentina has reached its highest level since the early 1990s, with only Venezuela and Zimbabwe currently experiencing higher inflation rates, as per data from the International Monetary Fund. In stark contrast, the United States has maintained inflation below 5% (correct, I don't trust this number neither but it's the official data), supported by a gradual five percentage point increase in key interest rates over a 14-month period.

To encourage investments in the country's currency, Argentina's central bank has implemented a rate hike, as stated in their recent announcement. The significant inflationary pressures have prompted substantial outflows of investments from the Argentine peso, resulting in a 23% depreciation against the US dollar within this year.

 

Thousands of Argentine worker and social organizations flooded Buenos Aires' main avenues to protest against hunger and poverty.

More than 18 million people are unable to cover their basic food needs

Argentina faces economic crisis as annual inflation reaches 104%

 

Politicians and their Low Time Preference

As the presidential election approaches in October, Economy Minister Sergio Massa is focused on averting a more significant devaluation of the currency and curbing inflation. Given President Alberto Fernandez's recent announcement that he won't seek reelection, Massa has emerged as a potential third-party candidate. The success of Massa's inflation-combating plan is likely to be closely linked to the election outcome.

Note: Pay attention to a Pro-Bitcoin presidential candidate Javier Milei.

 

Bitcoin Hits Historic Volume in Argentina

Simultaneously, alternative options such as Bitcoin, which operate independently of governmental and central bank control, are gaining traction. In Argentina, for instance, Bitcoin's peer-to-peer weekly volume surged to an all-time high of nearly $30 million in March on the Paxful exchange, as indicated by data.

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https://coin.dance/volume/paxful/ARS

After encountering some difficulties, the exchange recently resumed operations just a few days ago. Anyway, there's more exchanges in Argentina to choose from, which includes Bitex, SatoshiTango or Binance.

 

Bitcoin's Price Hits Remarkable Highs

That's correct! The price of Bitcoin in Argentina is once again approaching its all-time high. By examining the chart, it becomes apparent how readily understandable Bitcoin becomes in these regions of the world.

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As Argentina's elections approach (22 October 2023), there is anticipation regarding the pro-bitcoin presidential candidate's chances of winning. Javier Milei's support for Bitcoin has raised hopes that they may utilize the cryptocurrency to rescue Argentina's struggling economy. However, the outcome of the elections and the candidate's actions regarding Bitcoin remain uncertain. Many are curious to see if Bitcoin will indeed play a role in Argentina's economic revival. Will Bitcoin fix this? The answer to whether Bitcoin can fix Argentina's economy and its potential implementation will be revealed in the coming months or years.

 


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Thank you all.

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⚡ Daniela ⚡
⚡ Daniela ⚡

As a passionate writer with a keen interest in exploring innovative technologies, I discovered the captivating world of Bitcoin. Here to write my thoughts.


Me and Bitcoin
Me and Bitcoin

This blog focuses exclusively on Bitcoin, covering various aspects related to the cryptocurrency. It explores Bitcoin's history, its economic principles, and its potential implications in the financial world. The blog also delves into the potential impact of Bitcoin adoption on economics, politics, and society as a whole.

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