Argentina establishes exchange control to try to maintain its reserves

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Through a decree of necessity and urgency published this Sunday, the government of Mauricio Macri established that as of this Monday it will be necessary to request authorization from the central bank of Argentina to buy dollars.

The measure will be differentiated for companies, institutions and savers, but reminds of the controls to obtain the US currency that were imposed during the presidency of Cristina Fernández de Kirchner, now a candidate for the country's vice presidency

However, from the government they clarified that in the case of savers or natural persons they can acquire up to 10 thousand dollars per month -a previous request for authorization- and they can turn abroad the same monthly amount. In addition, they stressed that there will be no limitations for foreign trade or restrictions or extra charges for travel.

For companies and institutions, on the other hand, the restrictions are greater: they will not be able to acquire the US currency to treasure and the dollars coming from exports must be liquidated in the local market within a period of five business days after payment or 180 days later of the boarding permit.

On the contrary, there are no restrictions on imports or payment of debts at maturity, and holders of public debt securities with their original expiration date exceeded may use them for the payment of social security.

According to the recitals of the norm, “given various factors that impacted the evolution of the Argentine economy and the uncertainty in the financial markets, the executive branch saw the need to adopt a series of extraordinary measures aimed at ensuring the normal functioning of the economy".

Argentina's delicate economic situation, marked by annual inflation above 50 percent, worsened after the hard defeat of President Mauricio Macri in the primary of August 11 and the subsequent devaluation of the Argentine peso, which since then and in less than one month already accumulates a loss of more than 30 percent.