BUENOS AIRES — Argentina's economic crisis took a new, potentially calamitous turn Monday as the value of the national currency plummeted despite desperate measures by the government over the weekend to prevent its slide.
The devaluation comes as President Eduardo Duhalde faces new questions at home and abroad about his government's ability to lead the country out of its economic and social crisis.
Valued at one to the dollar in December and at 2.4 just a week ago, the peso closed Monday at an average rate of 3.8 to the dollar. Lines hundreds of yards long had formed outside Buenos Aires banks and exchange houses.
After a sharp drop in the value of the peso Friday, the government announced a series of emergency measures over the weekend to defend the currency, including a fixed rate on the value of dollars sold by the nation's central bank. But the peso continued to drop Monday.
The situation raises the specter of hyperinflation in a society already racked by an official unemployment rate of 22% and by daily protests that shut down roads and businesses.
Analysts warned that the devaluation and Argentina's failure to reach an agreement with the International Monetary Fund on terms for a new round of emergency loans could bring down Duhalde's government. The former senator and governor of Buenos Aires province came to power in early January after rioting and street protests forced President Fernando de la Rua and three other presidents to quit in quick succession.
"The free fall of the peso and a likely surge in inflation threaten the near-term viability of the Duhalde government," Credit Suisse First Boston said in a report.
With several local commentators also suggesting that public confidence in Duhalde had evaporated and that his government was in danger, the president said Saturday that he would remain in power "even if the dollar reaches nine pesos."
"We're going to live through moments more difficult than these," Duhalde said.
After a decade free from the high rates of inflation that were once the bane of the Argentine economy, prices rose 8% last month. At the same time, economic activity is contracting dramatically--construction starts in February were down 43% compared with the same period last year, according to figures released Monday.
Recent days have seen no letup in protests and social disorder.
