Economics
Cut Off From Credit, Argentina Gets Central Bank to Pay Bills
- Monetary base has grown by a fifth since start of lockdown
- Money emission stokes fears of inflation and hard debt default
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Argentina’s money supply is surging as the country deals with the economic fallout of the coronavirus pandemic, stoking inflation fears and increasing the chances of a chaotic debt default next month.
Since the country is cut off from credit markets as it nears default, it can’t borrow to fund stimulus programs, as other countries in the region are doing. Instead, the central bank is emitting massive amounts of money to cover government programs, threatening to drive up an inflation rate that is already among the highest in the world.