On this day December 19, 2001
Riots erupt in Buenos Aires after Domingo Cavallo’s corralito measures restrict the withdrawal of cash from bank deposits.
The riots were a predominantly middle-class uprising against the government of President Fernando de la Rúa, who had failed to contain the economic crisis that was going through its third year of recession.
Since 1991, the Argentine peso was at a fixed exchange rate with the US dollar. The 1-to-1 rate had been instrumental to overcome the chronic hyperinflation bursts of the late 1980s, but deprived Argentina of full control over its monetary policy, and a sudden revaluation of the dollar in 1997 ended up harming exports, which were the only important source of foreign currency at the time.
The unrest started when Economy Minister Domingo Cavallo, introduced restrictions to the withdrawal of cash from bank deposits, intending to stop the draining of deposits that had been taking place throughout 2001 and had reached the point where 25% of all the money in the banks had been withdrawn. These measures were aimed at controlling the banking crisis for a period of 90 days, until the exchange of Argentina’s public debt could be completed.
Although people could still use their money via credit cards, checks and other forms of non-cash payments, the enforcement of these measures caused delays and problems for the general population and especially for businesses. Massive queues at every bank and growing reports of political crisis contributed to inflame Argentina’s political scenario.
In this context, certain factions of the opposition, as well as interest groups who wanted a devaluation of the Argentine peso, seized the opportunity to fuel public anger and replace the government.
De la Rúa’s position had become unsustainable. An attempt by the Catholic Church to mediate between the government and the opposition in mid-December failed. Between December 16 and December 19 there were several incidents involving unemployed activists and protesters which demanded the handing-out of food bags from supermarkets.
These incidents ended up with outright looting of supermarkets and convenience stores on December 18, taking place on Rosario and the Greater Buenos Aires areas. This was of historical significance, as the previous Radical administration of Raúl Alfonsín had been forced to resign after a wave of looting in 1989.