The crawling peg is a mechanism that allows for the adjustment of a currency's value in small increments, thus avoiding abrupt movements that could generate significant economic imbalances. In this system, monetary authorities make periodic and predetermined adjustments to the exchange rate, resulting in controlled devaluations at regular intervals, such as daily or weekly. The main objective of the crawling peg is to maintain stability, avoiding the negative effects that could arise from a sudden devaluation, such as high inflation. Furthermore, this mechanism allows adaptation to environments with persistent inflation by keeping the exchange rate aligned with price increases, without causing abrupt variations. In emerging economies like Argentina, where inflation and limitations on access to international financing are constant challenges, the crawling peg becomes a useful tool. This system helps to smooth out currency fluctuations, preserving the competitiveness of exports and reducing expectations of abrupt devaluations, which in turn provides greater certainty and stability. While the crawling peg can represent a beneficial strategy for Argentina, its effectiveness will depend on the economic context in which it is applied and the coherence of the fiscal and monetary policies implemented.
