Estabilización con ancla cambiaria y apertura externa en el Uruguay de la década de 1990: una combinación difícil

This study analyzes the exchange rate based stabilization applied in Uruguay during the 1990s. A crawling peg with a low rate of depreciation was the economic tool chosen by three successive administrations to reduce inflation by using the exchange rate as the main nominal anchor. This process was uniquely complex, as the country experienced in the same years an important trade liberalization following the firm of MERCOSUR treatise. Inflation was reduced gradually and the policy resulted in continuous and significant real appreciation of the uruguayan peso ("atraso cambiario") which determined great problems in external balance that ended in a big financial crash in 2002. This paper analyzes the intertemporal problems associated with this policy through personal interviews with leading economic officials of the time and examines the public positioning assumed by politicians, businessmen and trade unionists of those years.