- As a containment strategy against currency devaluation and the internal search for dollars, Argentina is imposing new limits to international purchases and transfers;
- The access to dollars, precious metals, and transferences will need prior authorization from now on.
The announcement was made during the weekend. As a containment strategy against currency devaluation and the internal search for dollars, Argentina is imposing new limits to international purchases and transfers.
For individuals, the limit is $ 10,000 per month. According to the newspaper Folha de S.Paulo, exporters will have to return to the country the currency resulting from sales abroad in up to five days after receiving or up to six months after shipment.
In practice, it was the government of Mauricio Macri that implemented the measure to control currency exchange. The access to dollars, precious metals, and transferences will need prior authorization from now on.
In the last few weeks, the Argentine peso has experienced an intense devaluation. The worsening of the economic crisis in the country after the primaries of the presidential elections, without taking into account the effects of the conflict between the United States and China, had a strong impact on the country, which has an economy that is highly dollarized.
According to Folha, until 2017, exporters had to return foreign currency to the country in up to 30 days. Macri took down those controls, as he promised in the electoral campaign. Now he is imposing those rules again, given the context of scarcity of currency as the presidential elections loom ahead, with the first round occurring on October 27th.
The opposition’s slate, which is lead by the Peronist Alberto Fernández and includes the ex-president Cristina Kichner, won the primaries and is set to win the elections in the first round.
The journalist and columnist for Forbes, Kenneth Rapoza, says that the new rules are a disastrous return to the political economy of the Kichner era. For the journalist, the liberalist intentions of Macri did not go beyond just that, intentions.
“Over the last several months, Macri has installed Kirchner-era price controls on things like gasoline, and on Sunday by executive order he put limits on to the amount of dollars individuals and exporters can use,” described Rapoza.