MercoPress. South Atlantic News Agency
Argentina imposes foreign-exchange controls to contain the run for dollars
In other new measures, transferring money abroad will now require government permission Argentina on Sunday imposed foreign-exchange controls on exporters as it closed out a week of financial uncertainty that saw a sharp drop in the peso. Exporters were ordered to seek permission from the Central Bank of Argentina before purchasing foreign currency, according to a decree published in the Official Bulletin.
In other new measures, transferring money abroad will now require government permission. And individuals seeking to buy dollars now face a monthly limit of 10,000 greenbacks.
But there are no restrictions on people withdrawing dollars from their bank accounts -- a practice known here as the “corralito,” applied in late 2001 and the spark for the worst economic and political crisis in Argentine history. All these new measures will be in place until December 31.
Last month, markets were rattled when pro-business President Mauricio Macri suffered a huge loss in primary elections, and his opponent in October presidential elections Alberto Fernandez emerged as the favorite.
The decree published on Sunday said the currency measures were needed temporarily to “regulate more intensely the currency exchange regime and strengthen the normal functioning of the economy.”
Argentina has been in recession since 2018, and is battling rising unemployment and one of the world's highest inflation rates, running at more than 55%.
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Read all commentsEnrique,
Sep 02nd, 2019 - 10:34 pm +2Did you mean a “petty populist”? Then of course he is.
Anyway, I really hope you understand the dire situation Argentina gets itself into from time to time.
In 2015 the only thing you could do to avoid a default was borrowing. The agricultural surplus has already been captured with retenciones.
How was the “petty populist” supposed to cover for all the unpaid bills? He thought at the time that by using his pro-market charm, investments would flood the country. That never happened and the already ruined country from 2015 started to slowly sink in mid 2018.
Tough times ahead for Alberto.
Enrique, No contradiction my friend. The country was almost broke in 2015. Macri played his political cards. Eliminate retenciones (get support from the agro business), eliminating exchange and capital controls and start servicing the debt (nominally getting out of default, which enabled borrowing) hoping that investments would follow and so repay the debt.
Sep 03rd, 2019 - 02:47 pm +2When the supposed investments didn't show up (except for the carry traders) he had to undo #1 and now #2. So yes, retenciones are capturing again the surplus from the agro sector (AF could increase them but not so much).
Looks like :o)) is right. Taking into account the disastrous management from CFK and Macri combined, yes indeed we've been yearning to hit rock bottom.
@Tarquin Fin / @Enrique Massot
Sep 03rd, 2019 - 01:53 pm 0REF: “A steady hand will be required to pull Argentina from the deep bottom it is now”:
They + Brazil should be feeling comfortable at the bottom of the Black Economic Hole. After all, they had been yearning for years to be [or to remain] there! So why rock the boat?
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