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.
Facts
Event DateExact day of the announcement is not confirmed in the cited source; month and year are attested. LocationMexico, Brazil, Argentina and Latin America 1 Connections
Associated With
The IMF coordinated rescheduling and lending conditionality across Mexico, Brazil and Argentina through the 1980s.
Source How Jacques de Larosiere and Paul Volcker Contained the 1982-89 Global Debt Crisis
World Bank, Institutions The World Bank joined IMF-led restructuring and adjustment lending across the affected countries.
Source How Jacques de Larosiere and Paul Volcker Contained the 1982-89 Global Debt Crisis
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Source Latin American debt crisis (Wikipedia)LeadQuote, Lead
The Latin American debt crisis (Spanish: Crisis de la deuda latinoamericana; Portuguese: Crise da dívida latino-americana) was a financial crisis that originated in the early 1980s (and for some countries starting in the 1970s), often known as La Década Perdida (The Lost Decade), when Latin American countries reached a point where their foreign debt exceeded their earning power and they could not repay it.
Sources
1. How Jacques de Larosiere and Paul Volcker Contained the 1982-89 Global Debt Crisis
Peterson Institute for International Economicsblog post text
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- Associated With: International Monetary Fund
- Associated With: World Bank
View the Source 2. Wikipedia
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Latin American debt crisis (Wikipedia)
Article text
This occurred in August 1982 when Mexico's Finance Minister, Jesús Silva-Herzog, declared that Mexico would no longer be able to service its debt.
In Group: Latin American Debt and Currency Crises, Lead
The Latin American debt crisis (Spanish: Crisis de la deuda latinoamericana; Portuguese: Crise da dívida latino-americana) was a financial crisis that originated in the early 1980s (and for some countries starting in the 1970s), often known as La Década Perdida (The Lost Decade), when Latin American countries reached a point where their foreign debt exceeded their earning power and they could not repay it.
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