Argentina imposes currency controls amid debt crisis

Source: Xinhua| 2019-09-02 09:40:03|Editor: Shi Yinglun
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BUENOS AIRES, Sept. 1 (Xinhua) -- The Argentine government imposed currency controls on Sunday amid an acute debt crisis that has battered the peso.

Average Argentinians will need the authorization of the Central Bank of Argentina (BCRA) to buy U.S. dollars in the coming months, the government said in a decree.

The decree, in effect until Dec. 31, was published in an official bulletin and signed by President Mauricio Macri and his cabinet.

"Given recent economic-financial events ... and the uncertainty generated as part of the ongoing election process, it is necessary to adopt temporary and urgent measures to regulate the exchange rate with greater intensity," the government said.

The move aims "to reduce the volatility of financial variables and contain the impact of fluctuations of financial flows on the real economy," it added.

According to the decree, the BCRA will establish under what circumstances "purchasing foreign currency and precious coins, and transferring them abroad, will require prior authorization."

Separately, the bank issued a statement saying private citizens looking to buy dollars will be subject to a limit of 10,000 dollars a month.

Meanwhile, "exporters will have to sell foreign currency derived from exports on the local market within a maximum of five working days after collecting or 180 days after the loading permit (15 days for raw materials)," according to the special measures.

On Friday, the peso slid another 1.74 pesos against the dollar, devaluing a total of 33.2 percent compared with August last year.

Since Argentina held primary elections on Aug. 11, the BCRA has sold some 2.038 billion dollars in reserves to shore up the national currency.

The Finance Ministry has sold another 626 million dollars over the same period.

The conservative ruling party's loss in the first round of the elections to the left-leaning opposition led to fears Argentina may default on its ballooning foreign debt, which sent jitters through financial markets.

Finance Minister Hernan Lacunza last week announced the government will extend the deadlines for short-term debt payments to make more dollars available on the market to prop up the peso, since stabilizing the exchange rate is the current priority.

The decision led credit-rating agency Standard & Poor's to briefly lower the country's credit grade to "selective default," meaning it can pay some of its debts but can't meet all of its debt obligations.

The country's general elections will be held on Oct. 27.