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ECONOMY | 16-08-2020 08:01

Fernández hints at changes to US$200 greenback purchase quota

Peronist leader says Argentina is facing high demand "from small savers," with knock-on effect for country reserves. Central Bank officials, however, say no changes are planned.

President Alberto Fernández said over the weekend that the government may introduce changes to the US$200 monthly limit on US dollar purchases based on the official exchange rate.

“This is something that we are studying,” Fernández said when asked during an interview with the La Red radio station if he was considering restricting the monthly quota.

He added that he will discuss the issue later with Economy Minister Martín Guzmán before reaching a conclusion.

"We have a very large demand from small savers," added the president.

The Peronist leader said that said that some citizens – even those on state support programmes – were buying dollars, though he said not everyone was buying greenbacks "to speculate," saying some did so in order to purchase items that allows them to make a little money on the side. Nevertheless, he said, such actions reduce the reserves of the Central Bank.

"Nowadays, that is a demand of small savers. They are not so important sums" but "they are a problem (...) because 200, more 200, more 200, more 200," affects the coffers of the Central Bank, said Fernández.

Fernández also said that the country’s cash reserves are about US$10 billion, at the same levels they were at when his presidency started on December 2019. “We received a country that was in default and in that context the pandemic began.”

According to the TN news channel, authorised purchases cost the Central Bank some US$800 billion in July. 

Capital controls were reintroduced in 2019, under former president Mauricio Macri, when the Central Bank imposed a US$200 quota on monthly greenback purchases per person. Later that year, Fernández’s government added a 30 percent tax on those purchases.

The tax would boost the current official exchange rate of 77.3 pesos per dollar in banks to about 100 pesos, which is still lower than the rate of around 130 pesos in the black market.

An official from the Economy Ministry, with direct knowledge of the discussions, said that the US$200 quota will remain unchanged for now. The official, who asked not to be identified because the information isn’t yet public, said further restrictions are not being studied.

On Sunday, Central Bank officials briefed journalists that no new measures were under consideration, reiterating that anyone seeking to acquire dollars "may continue to do so."

"There is no measure under study that goes in the direction of reducing or preventing the purchase of savings dollars," sources told Noticias Argentinas.

– TIMES/AFP/BLOOMBERG/NA

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