Wednesday, 19 February, 2020

President Energy sees no material impact from Argentina currency controls

President Energy sees no material impact from Argentina currency controls President Energy sees no material impact from Argentina currency controls
Ginger Lawrence | 03 September, 2019, 06:55

The IMF said that it was studying the new measures taken by the Macri government.

The measure, which is scheduled to be in place through the end of the year, means major exporters, which will need permission from the central bank to access the FX market to purchase foreign currency and make transfers overseas.

Last month, markets were rattled when pro-business Argentine President Mauricio Macri suffered a huge loss in party primary elections, and his leftist opponent Alberto Fernandez emerged as the favorite for next month's presidential elections.

In an official bulletin issued on Sunday, the government said that it was necessary to adopt "a series of extraordinary measures to ensure the normal functioning of the economy, to sustain the level of activity and employment and protect the consumers".

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

Hours after the decree was published, a spokesman for the International Monetary Fund, with which Argentina has a $57-billion standby agreement, said its staff were analyzing Argentina's "capital flow management measures with the aim of protecting exchange rate stability and the savers".

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The storm was causing havoc for travellers on Florida's east coast, where some airports and petrol stations were closed. One showed floodwaters rushing through the streets of an unidentified town at almost the height of a vehicle roof.

The South American country's global dollar and euro-denominated bonds also fell to record lows on Monday while its financial stocks tumbled and risk premiums shot up after the currency controls were imposed.

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.

She's now the front runner for the presidential election proper on October 27.

It also requires exporters to liquidate their foreign exchange earnings in the local market under deadlines.

"It is an uncomfortable measure for us that Argentina has already had", Lacunza said in an interview with the América TV channel on Sunday night.

The peso opened up 0.42% stronger at 59 per dollar, but the currency weakened 1.56% in unofficial markets to a record low of 64 pesos per dollar, traders told Reuters, an unusual divergence that reflects investor anxieties over the controls.