About the Existence of Common Internal Causes of Recent Latin American Currency Crises

Financial liberalization and the stability of currency pegs

“…6 Equally remarkable was the level of foreign borrowing by domestic firms in these countries. 7 In a recent paper, Henn (2003), in an examination of the currency crises in Latin America-Mexico (1994), Brazil (1998 and Argentina (2000Argentina ( -2002, finds that all of them had foreign exchange anchors that became unsustainable due, among other reasons, to excessive debt.…”