How did the Austral Plan attempt to reduce inflation in Argentina?

The Austral Plan was an austerity program launched by the government of President Raúl Alfonsín to combat the severe economic instability and hyperinflation facing Argentina in the mid-1980s.1

To reduce inflation, the plan implemented several key measures:

• New Currency: The government introduced a new currency, the austral, to replace the existing peso.12
• Controls: The program enforced strict wage and price controls to stabilize the cost of living.1
• Devaluation: The government implemented currency devaluations as part of its broader economic restructuring.1

Initially, these measures successfully lowered inflation and restored the confidence of international bankers, allowing Argentina to restructure its foreign debt. However, the plan's long-term effectiveness was limited; inflation eventually began to rise again, reaching nearly 388 percent annually by the end of 1988, while the austral experienced a significant decline in value against the U.S. dollar.1