Argentina struggling to stabilise currency

Economic research

  • Argentina
  • General economic

12th September 2019

Argentina has introduced currency controls to stabilise peso in the run-up to elections.

  • Partial currency restrictions were introduced to stabilise the peso, which had depreciated rapidly since the primary elections.

  • However, transfer risk remains elevated in the face of high political uncertainty and there is a risk of further restrictions.

The government of Argentina has imposed partial currency restrictions as of September 2 in order to regulate transactions in the foreign-exchange market. These measures followed a sharp fall in the peso and official reserves - by about 20% - after an unexpectedly large defeat of President Macri in the primary elections on August 11.

For corporates, these controls oblige exporters to repatriate foreign-currency earnings within five business days after collection or 180 days after the shipment approval (15 days in the case of commodities). Additionally, businesses will require permission to repatriate profits abroad. However, there are no restrictions on the purchase of foreign-currency to facilitate trade or to pay debt when due.

Since the imposition of the restrictions, the peso has stabilised around 56 per USD, from around 60 the week before and 45 prior to the primary elections.

Peso and reserves plummet 20% after August primaries

For the time being, the restrictions do not impair the ability of businesses to access foreign exchange for trading or debt service purposes. However, the collapse of the peso exacerbates inflation, postponing the economic recovery. Given the challenging economic environment and high political uncertainty in the run-up to the general elections on October 27, transfer risk remains high.


Greetje Frankena, Principal Economist
+31 20 553 2406

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