The US dollar suffered a record fall on March 27, 1985 over mounting concerns about the solvency of the American banking system and a rapidly growing trade deficit.
New data from the US Commerce Department showed that the current account deficit for 1984 had swelled to $101.6 billion. It was estimated that, for the first time since World War I, the US became a net debtor nation some time in February, 1985.
The American and international banking systems had been jolted by a series of bank failures and near-failures in Ohio; Alberta, Canada; and, in the week of March 27, Texas. Earlier in the week, the International Monetary Fund had ended support to the Argentine government over its failure to enact satisfactory budget cuts, after taking similar measures against Brazil earlier in the year.
The world’s major banks began to prepare for a possible crash, with the “Group of 14” top banks meeting in Munich to devise a response to the global debt crisis.