Currency Controls Imposed to Support Economy in Argentina
Argentina has placed a currency control to stabilize markets as they face a deepening financial crisis. The government has moved to restrict foreign currency purchases following a sharp drop in the value of the peso. Firms will also have to seek central bank permission to sell pesos to purchase foreign currency and to make transfers overseas.
Argentina is also sought to defer dent payments to the International Monetary Fund (IMF) to deal with the crisis. From a released official bulletin, the government wrote that it was needed to adopt a series of extraordinary measures to guarantee the normal functioning of the economy to sustain the level of activity and employment and protect customers.
The central bank also mentioned that the measures were meant to maintain currency stability. They also said that as individuals can continue to purchase US dollars, they may need to seek permission to buy more than $10,000 (£8,223.50) a month. These measures will be in place until the end of this year.
Argentina has been on a financial crisis struggle which has been aggravated by the president’s defeat in a recent primary poll. The peso fell to a record low in the previous month after the vote indicated that the business-friendly government of President Mauricio Macri could be ousted in elections in October.
Mr. Macri, who was elected in 2015, promised to boost Argentina’s economy with a raft of liberal economic reforms. However, the country is currently in a deep recession and has one of the world’s highest inflation rates going at 22 percent during the first half of the year. The country’s economy contracted by 5.8 percent in the first quarter of 2019 after 2.5 percent of shrinkage took place in 2018. Three million people have plunged into poverty over the past year.
Reference
https://www.google.com/amp/s/www.bbc.co.uk/news/amp/business-49547189
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