JANUARY 23, 2002
Event organizers in Argentina suffering
The decision by the government of Argentina to cut the value of dollar deposits in the country's banks is bad news for any company that had been hedging its bets on the failure of the peso but keeping hold of US dollars as well.
The move was voted through at the start of the week in an effort to stop the financial system self-destructing as companies cope with the 40% devaluation of the peso. The move froze an estimated $45bn worth of dollar deposits to stop a run on the banks. The move was a complete about-face by the government of President Duhalde, who promised to leave bank deposits untouched, but came as several Argentine banks stood on the verge of collapse.
The move means that millions of people have lost half of their life savings and many companies have lost investment money. This means that any local organizers who were planning to hold events in Argentina now have half the money that was previously available. This could have an effect on the Argentine Rally and on the planned Premier 1 race in 2003.. It is also likely to hurt all the Argentine racers who are active outside the country.