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Domingo Cavallo

Domingo Felipe "Mingo" Cavallo is an Argentine economist and politician. He has a long history of public service and is known for implementing the Convertibilidad plan, which fixed the dollar-peso exchange rate at 1:1 between 1991 and 2001, which brought the Argentine inflation rate down from over 1,300% in 1990 to less than 20% in 1992 and nearly zero during the rest of the 1990s. He is also well known for implementing the corralito, which restrained savers from withdrawing their own money from bank accounts and was followed by the December 2001 riots and the fall of President Fernando de la Rua.

Cavallo was born in San Francisco, Cordoba Province to Florencia and Felipe Cavallo, Italian Argentine immigrants from the Piedmont Region. He graduated with honors in Accounting (1967) and Economics (1968) at the National University of Cordoba, where he earned his Doctorate in Economics in 1970. He married the former Sonia Abrazian in 1968, and had two children. He would later enroll at Harvard University, where he earned a second doctorate in Economics in 1977.Noticias. 12 September 1991.

In July 1982, after the Falklands War fiasco brought more moderate leadership to the military dictatorship, Domingo Cavallo was appointed President of the Central Bank. Cavallo inherited the country's most acute financial and economic crisis since 1930 and a particularly heinous Central Bank regulation painfully remembered as the Central Bank Circular 1050. Implemented in April, 1980, at the behest of conservative Economy Minister Jose Alfredo Martinez de Hoz, the policy tied adjustable loan installments (nearly all lending in Argentina is on an adjustable interest basis) to the value of the US Dollar locally. Exchange rates were controlled at the time and so, it raised little concern. The next February, however, the Peso was sharply devalued and continued to plummet for the rest of 1981 and into 1982. Mortgage and business borrowers saw their monthly installments balloon over ten-fold in just a year and many (including homeowners just months away from paying off their loans), unable to keep up, either lost their entire equity or everything outright.

Related websites

INDEC: consumer prices

Clarin. 27 July 1996

La Nacion. 20 March 2001

La Nacion. 20 December 2001

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description of how he fixed the economy in Argentina

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