Late in 1994, Mr. de Kwiatkowski purchased foreign currency contracts worth approximately $6.5 billion, and lost an estimated $215 million a few months later.
Soon after Japan ran into its own zero lower bound, Ben Bernanke, who was then an economist at Princeton University but is now chairman of the Fed, argued that the Bank of Japan needed to set a higher inflation target, buy more assets and devalue the yen by purchasing foreign currencies.
If the only reason to buy foreign currency was to use it to purchase foreign goods, international exchange would be pretty simple.
If the currency appreciates too much, the government must sell local currency and buy foreign currency.
The net effect of a weaker sterling is therefore profit dilutive due to the food and drink which is purchased in foreign currency, although this is partially mitigated in the next financial year by existing contracts.
In October the government ordered mining and energy firms to repatriate all their export dollars and citizens to justify every purchase of foreign currency.
The latest amnesty also seems to be a tacit admission that what Kirchner billed last year as a "cultural battle" against the dollar — a plan to get Argentines to start thinking in pesos and severely curtail the purchase of foreign currency — has failed.
The next day, the central bank introduced restrictions on the purchase of foreign currency within Iceland.
The Clinton administration has shown no inclination to push down the dollar to promote exports by making American goods cheaper when purchased in foreign currencies.
Thomas Cook has also placed a temporary £1,000 limit per customer on purchases of foreign currency in its High Street shops.
But the government's huge purchases of foreign currency have created another problem: what to do with the money.
