the government allowed a one-to-one conversion on loans, but they set a different conversion
rate for deposits: the outcome was a shambles. Eventually, the peso plunged to 3.18/$ resulting
in major upheavals in the economy. Fortunately, the rejection of the dollar peg, coupled with
more prudent policies, eventually paid off. By 2005, the economy had regained its 1998 level,
the budget deficit had turned into a surplus, and the public debt was restructured. Exports
strengthened and the country is now categorized as a managed floating economy by the IMF. A
caveat is in order: the devaluation triggered an inflation spike resulting in a fall in real wages
and a permanent increase in some basic prices; in sum, a redistribution effect causing greater
income inequality and higher poverty