Download or read book Crisis Management in Argentina During the 1994-95 Mexican Crisis written by Eduardo J. J. Ganapolsky and published by World Bank Publications. This book was released on 1998 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Mexican crisis of 1994-95 had strong spillover effects on Argentina. The Argentine government successfully announced a series of policies to mitigate the contagion effects. This paper studies how capital markets reacted to each policy announcement and news. Capital markets welcomed announcements that demonstrated a firm commitment to the currency board. The agreement with the IMF, the dollarization of reserve deposits in the central bank, and changes in reserve requirements had a strong positive impact on market returns. After a period of higher volatility, the appointment of a new finance minister significantly decreased the variance of stock and bond returns, while lower reserve requirements increased the volatility of interest rates.