Latin American Debt Crisis

In mid-August 1982, Mexico told the United States Treasury, the Federal Reserve and the IMF that it could no longer service roughly 80 billion dollars in foreign debt, most of it dollar-denominated and contracted against expected oil revenue. Brazil, Argentina and other heavily indebted Latin American governments followed within days as sharply higher United States interest rates under Federal Reserve Chairman Paul Volcker and falling commodity prices made existing debt loads unpayable. The ensuing decade of rescheduling, austerity and stalled growth across the region is remembered as Latin America's Lost Decade.