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Argentine central bank cuts dollar purchase limit sharply as forex reserves tumble

Baku, October 28, AZERTAC 

Argentina’s central bank announced early Monday morning it would sharply cut the amount of dollars individuals could buy, amid concerns over outflows of foreign exchange reserves accelerating after President Mauricio Macri was voted out of power on Sunday, according to Reuters.

The bank said it would restrict dollar purchases to $200 per month via bank account and just $100 each month in cash, until December, a dramatic adjustment from the $10,000 restriction the bank imposed at the beginning of September along with other currency controls to stem a slide in the peso.

“Given the current degree of uncertainty, the board of the BCRA has decided to take a series of measures this Sunday that seek to preserve the reserves of the Central Bank,” the entity said in a statement.

Guido Sandleris, the central bank chief, will hold a press conference at 8:30 am (1130 GMT) to explain the details of the measures, it added. Argentina’s Peronists earlier swept back into power on Sunday, ousting conservative Mauricio Macri in an election result that puts Latin America’s third biggest economy back under the control of a more leftist government after it was battered by economic crisis.

The country has been grappling with frenzied markets since an August primary election vote where Peronist candidate Alberto Fernandez - now president-elect - soundly beat Macri, sparking a sell-off of the local peso currency, bonds and equities. The sharp peso slide prompted the Macri’s administration to roll out capital controls to protect the currency, including imposing caps on dollar purchases. Foreign reserves have nonetheless tumbled by over $20 billion since.

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