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Argentina loosens currency market, limits dollar purchases

© AFP

Text by FRANCE 24

Latest update : 2014-01-27

Argentina eased unpopular restrictions on dollar purchases for the first time in more than two years on Monday, but placed a $2,000 monthly limit on the amount of hard currency its citizens will be allowed to buy.

Jorge Capitanich (pictured main), the head of President Cristina Fernandez's cabinet, told a press conference that permission to purchase dollars will be restricted to “working professionals, workers and small business owners.”

Large businesses and investors will be barred from hard currency purchases, and all transactions will have to be approved by the national tax agency, Capitanich added.

Buenos Aires announced last week that it would drop the measure put in place in 2011 restricting Argentinians' access to foreign currency to prevent capital flight.

The momentous decision to ease access to dollars was made after the Argentine peso suffered its worst single-day fall in more than a decade.

Since the beginning of the year, the peso has lost about a fifth of its value, and the measure was seen as a bid to halt that precipitous slide by boosting confidence in the economy.

The recent economic upheaval comes 12 years after Buenos Aires roiled financial markets by defaulting on nearly $100 billion in bonds, unleashing a tidal wave of capital flight and runaway inflation.

Argentines remain traumatized by the 2001 collapse, which wiped out the savings of millions of people from the middle class.

(FRANCE 24 with AFP)

Date created : 2014-01-27

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