The Argentine Congress approved an emergency economic bill Sunday, giving the go-ahead to the long-awaited reform program aimed to tackle the country's worst economic crisis in ten years.
The bill, which was tabled by the government of President Eduardo Duhalde, cleared the floor in both the lower house and Senate with an overwhelming vote and it would take effect immediately after it was signed into law by the president.
The bill authorizes the government to give up the policy of pegging the peso to the U.S. dollar, devaluate the peso, and set the exchange rate, issue banknotes and renegotiate settlement of Argentina's foreign debt with foreign lenders.
The bill also empowers the government to freeze the wage and prohibit employers from laying off workers in 90 days.
Duhalde, the fifth Argentine president in two weeks, attributed the economic and social chaos to the rigid peg policy.
The new exchange rate was unavailable for the moment, but the devaluation of the peso was widely expected to be around 30 percent, taking the 1:1 rate between the peso and the dollar to somewhere between 1:1.33 to 1:1.40.
Some government sources said that Argentina would adopt a dual rate system -- an initial fixed rate of about 1.40 pesos to the dollar for business and financial transactions, and a free-floating rate for individuals buying dollars.
( January 7, 2002)
