In Argentina’s pretty capital Buenos Aires, may change with more poor people live on the streets. Photo: Schölla Schwarz, CC BY 3.0, Wikimedia Commons

Many Norwegians today spill their coffee when Norges Bank raises the interest rate to 3.25 percent. In Argentina, the reality looks somewhat different.

For Norwegians who in recent years are used to interest rates almost down to zero, an increase up to 3.25 percent can be painful enough.

But it could have been worse. In Argentina, people have to struggle with a key interest rate of a whopping 91 percent.

Fria Tider has an article about this:

Argentina is in a very difficult economic situation with inflation of over 100 percent in March and a currency, the peso, which is falling in value against the dollar.

The country’s central bank recently raised its policy rate to 91 percent, which is the highest level in over 30 years, TT reports. This has created great difficulties for Argentine borrowers.

Such galloping inflation has special effects on the everyday economy of society:

Restaurant owners in Buenos Aires have now stopped printing the prices on their menus because of the ever-increasing prices.

At the same time, agriculture has suffered from a severe drought, which has further worsened the economic situation.

People lose their jobs and have to leave their homes. More and more people live on the street.

For the authorities in the country, this is a very demanding situation:

President Alberto Fernandez has promised that there will be no devaluation of the peso, but the devaluation rumours and market flight from the peso continue.

This has also caused concern that the International Monetary Fund will not pay out the 3.9 billion dollars promised to Argentina.

Economic crises are nothing new in Argentina. The country has struggled for decades, with constant downturns and crises in the economy. For the population, this is something they have had to learn to live with as best they can.

In countries with such inflation, a barter economy tends to develop, where people try to make themselves less vulnerable to fluctuations in the value of the exchange rate. I fix your car and you give me a load of potatoes.

Argentina is not alone in having major problems on this continent. In relation to the socialist bankruptcy estate of Venezuela, the Argentines’ problem is almost a trifle.