What is Corralito? »Its Definition and Meaning [2019]

Corralito is the name official of the economic measures adopted in Argentina at the end of 2001 by the Minister of Economy, Domingo Cavallo , with in order to stop a bank run, which remained in effect for one year.The corralito almost completely frozen the bank accounts and prohibited the withdrawal of accounts denominated in US dollars.

The word corralito is the tiny form of pen , which means "pen, animal pen, enclosure"; The diminutive is used in the sense of “small enclosure” and also “a playground”.This expressive name refers to the restrictions imposed by the measure.The term was cradled by the journalist Antonio Laje.

In 2001, Argentina was in the middle of a crisis : very indebted, with an economy in complete stagnation (almost three years of recession), and the exchange rate was set at a US dollar by weight Argentine by law, what he did Non-competitive exports and effectively deprived the State of having an independent monetary policy.Many Argentines, but especially companies, fearing a economic collapse and possibly a devaluation, they were transforming pesos into dollars and withdrawing them from the banks in large quantities, generally transferring them to foreign accounts (capital flight).

On December 1, 2001, with the order to prevent this drain destroy the banking system , the government froze all bank accounts, initially for 90 days.Only a small amount of cash was withdrawn weekly (initially 250 Argentine pesos, then 300), and only from accounts denominated in pesos.withdrawals from accounts denominated in US dollars were allowed, unless the owner agreed to convert the funds into pesos.Transactions through credit cards, debit cards, checks and other means of payment could normally be made, but the lack of cash availability caused numerous problems for the public in general and for businesses.

Protest against banks in 2002.The big sign says «Bank robbers-return our dollars ».

The corralito caused an immediate setback in the government .Even more people began trying to withdraw their money from the banks, and many ended up in the fight to the court for their right to have their funds (and that right was granted from time to time).