Argentina imposes more restrictions on U.S. dollars

By Agence France-Presse
Tuesday, August 7, 2012 6:30 EDT
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Argentina has imposed another restriction on the sale of US dollars, barring travelers from purchasing them unless the dollar is the currency of their destination, the government said Monday.

The restriction, which takes effect next week and was detailed in the official gazette, is the latest twist in the government’s effort to discourage Argentines from using and saving in greenbacks.

Despite intense criticism from business circles, Argentine authorities have been pressing ahead with their policy of tightening currency controls to try to stem capital flight and protect foreign exchange reserves.

Buenos Aires has implemented drastic measures to control foreign exchange operations since the end of 2011, in a bid to preserve its monetary reserves slated to repay the country’s debt.

Argentina’s reserves shrank nearly $6 billion to $46.6 billion in a matter of months, prompting President Cristina Kirchner’s government to slap tight controls on the currency market by limiting dollar purchases.

The fight against the dollarization of the economy — all major transactions as well as savings until recently had been dollars — led to severe restrictions for banks, companies and small savers seeking to cope with inflation, which stands at 25 percent, according to independent analysts.

The government says inflation is just 10 percent.

The measures have put a damper on real estate transactions and construction — two key sectors of the economy — worsening the risk of recession, many experts say.

The government says the dollar is worth 4.60 pesos; on the black market it trades at 6.21

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
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