Crisis moderates after Argentina restricts dollar purchase

by   |  VIEW 360

Crisis moderates after Argentina restricts dollar purchase

On Monday, the 2nd of September 2019, Argentina’s benchmark sovereign international 2028-dollar bonds fell by more than 2 cents to hit a new low of 36.5 cents, while the official and black-market pesos bifurcated followed by impose of a sweeping capital control aimed at preventing a mass-scale currency drift amid deepening risk of defaults.

In point of fact, after Argentina’s center-right President Mauricio Macri, a businessmen’s favourite took office back in the 2015s, he wiped out the concept of capital control following which Argentine Peso had shrugged off just a notch shy of 600 per cent against its American counterpart to 58.25 Peso per dollar from an earlier 8.25 peso per dollar before Macri took the office.

Nonetheless, after Mauricio’s conservatives had stomached a landslide defeat in an August primary election and his chances of being re-elected in an October election had more or less been evaporated, Argentina’s central bank had agreed to go back to a capital control policy, which in effect helped peso to add 0.88 per cent on Monday’s (Sept.

2nd) market closure. However, in the black markets, peso weakened 0.79 per cent further to wrap up the day at 63.5 peso per US dollar, while addressing to Monday’s (Sept. 2nd) gain of pesos against its American counterpart followed by imposing a sweeping capital control policy despite a much-stronger American dollar, Argentine Treasury Minister, Hernan Lacunza said in a press conference on Monday (Sept.

2nd), “The dollar at this level is now strong enough. All these measures have the central objective of stability. ”