Argentina imposes foreign exchange controls to reassure markets


The decision came into effect via a decree published Sunday and is expected to remain in effect until the end of 2019.

The World with AFP Posted today at 21h48

Time to Reading 1 min.

The government is trying to reassure the markets after a week of uncertainty in the markets and a sharp depreciation of its currency. Argentine exporting companies will have to temporarily request the Central Bank's authorization to buy foreign currency, according to an official decree published on Sunday. This exchange control must remain in force until 31 December 2019.

On Wednesday, August 28, Argentina asked the International Monetary Fund (IMF) to reschedule its debt of $ 57 billion. According to the agreement signed in 2018, the first repayments must occur in 2021. The IMF responded by assuring "Continue to be alongside" of Argentina "In these difficult times" and study the file.

The Argentine peso fell sharply during the month of August

The Argentinean economy, in recession since 2018, has one of the highest inflations in the world (25.1% between January and July, 54.4% over the last 12 months), a drop in consumption, closures of shops and an increase in poverty (32% in 2018) and unemployment (10.1% this year).

The Argentine peso has lost more than 20% since August 11 and nearly 70% since January 2018. The main fear of markets and Argentineans themselves is now the default.

In 2001, the country, unable to meet the repayment deadlines of its debt, had experienced the largest defaults in history and a serious economic and social crisis that had traumatized Argentineans and financial markets.

Article reserved for our subscribers Read also Argentina seeks to curb galloping inflation

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