Argentina’s Central Bank has tightened currency controls for individuals, restating a previous regulation to block a common arbitrage strategy that drained Central Bank reserves.
Sources at the Central Bank confirmed the move to several local news agencies on Friday morning.
Effective immediately, anyone buying official dollars will be banned for 90 days from purchasing financial assets settled in foreign currency, and vice versa. The measure, known as a "cross restriction," revives a rule scrapped earlier this year and extends it beyond company executives and financial directors to cover all individuals.
This restriction had been lifted on April 14, when the government announced a partial easing of rules for individuals seeking to purchase foreign currency, although they remained in place for companies.
The government is targeting a manoeuvre where dollars are bought at the official rate and resold in financial markets such as the MEP or CCL, where they fetch a higher price, yielding easy profits.
The step comes after the Central Bank burned through US$1.1 billion the week before last without managing to stabilise the peso.
Milei’s government says the measure is designed to limit currency speculation and give it greater control over foreign exchange manoeuvres in order to build up Central Bank reserves.
The accumulation of dollars by the Central Bank and the Treasury to meet debt obligations is one of the main conditions of Argentina’s deal with the International Monetary Fund (IMF), which serves as the framework for the country’s broader economic programme agreed with Washington.
Key details
– Central Bank Communication “A” 8336 imposes a 90-day ban on combining purchases of official dollars with foreign currency financial assets.
– A sworn declaration is now required from clients to comply with the rule.
– The measure extends earlier limits that applied only to executives and families of financial institutions.
– The restriction, lifted in April, is now reinstated to preserve reserves.
– TIMES/NA
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