International Business Analysis: Argentina's Peso Devaluation Impact

This report analyzes the impact of Argentina's peso devaluation on international business, focusing on the effects on importers, exporters, and international investors. The devaluation, triggered by the removal of currency controls, significantly impacts importers by increasing the cost of foreign goods, while potentially boosting exporters through increased competitiveness. International investors face a complex situation, with potential for economic improvement but also challenges due to financial restrictions and investor confidence. The report also examines the effects of devaluation on Argentinians seeking to invest abroad, and the government's measures to manage the situation. The analysis draws on the provided article and supporting research to provide a comprehensive overview of the economic consequences and implications for international trade and investment within Argentina.

Running head: INTERNATIONAL BUSINESS
International business
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The time when the Argentina’s peso plunged by 30%, government’s official said not to
create panic, it is all about the country’s new president agenda, which has a larger plan to revive
the troubled economy and inspire the international trade.
1. Devaluated the Argentina’s peso had badly affected to the importers resides in country.
As the currency has decreased its value then importer has to pay more price to import
from the foreign country as compare to US dollar. To avoid the further reduction of the
money supply, the government of Argentina continuously put a hard restriction on the
importers. DJAIs regulate imports to protect Argentine international reserves. But the
new bureaucratic regulations leads to a complicated situation as a lack of alternative
financiang options for the Argentine buyers. It may delayed the trade (Hsingn & Alford,
2016).
2. The peso devaluation hardly increased the competitiveness its exports. The rising
infalation take away quickly. It is closing the gap between the official and the black
market exchange rates. Resultant trade barrier and the commodity price traded among the
bloc such as wheat and soybeans are the main concerning matter for the Argentina’s
neighbours. Concerning one of its bilateral trade partner Brazil, has declined it import by
8%. Overall the trade between Argentina and Brazil fell to 6.9 %. It can lead to a
energetic pust to find more open market as the lack of strong regional incorporation
(Meade et al 2016).
3. Argentian’s peso has dropped 30 percent to arecord low for 65 per one US dollar. As per
the investors point of view, the Argentine economy is likely to see a kind of
improvement, on the other hand there ois an expectation among the investors that it will
be hard to overcome most of the challenges. Which cause downgraded the economy. The

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financial restrictions damage the investors confidance in the country. But officials
claimed such restrictions will catch a higher amount of capital flow to reach the safer
destination. One of the biggest challenges is the president require a quick financial
support in short term. At the time of his campaign, he always needs a dollar based
investments delibatrately for reentering Argentina and to make a financial cushion which
helps to heal such sudden financial devaluation and create a free currency trading (Malik,
2016).
Concerning to enter the country by the international investors, will happen if the
investors gain confidence and assure themselves that to enter the country is safe and will
make a good business.
4. Devaluation does not kindle economic activity rather it supress those who are
economically active, however it causing the investors who initiate rise to take their
capital elsewhere. It is the time where the governments response the Peso’s plunge. The
country’s finance department made restrictions on the people residing in Argentina not to
buy foreign currency more than $10,000. Such restrictions are for the Argentines to
prevent their savings. As for the need the Argentine people and the company keep their
money in country while banishing funds will earn from outside. So there is a limit to
bring money outside of the country (Kelly, 2018).

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Reference
Hsing, Y., & Alford, M. (2016). Impacts of Peso Depreciation and Changes in Other Business
and Economic Variables on Aggregate Output in Argentina. Global Journal of Management And
Business Research.
Meade, B., Puricelli, E., McBride, W. D., Valdes, C., Hoffman, L., Foreman, L., & Dohlman, E.
(2016). Corn and soybean production costs and export competitiveness in Argentina, Brazil, and
the United States. USDA Economic Information Bulletin, 154.
Malik, S. (2016). A New Economic Era: How Macri's Holdout Solution Hopes to Attract Foreign
Investnemt and Revitalize Argentina's Economy.
Kelly, A. (2018). Flight of the Condors: The Impact of Vultutre Investors on Argentina's
Sovereign Debt Default. Fla. J. Int'l L., 30, 27.