Argentina tightens dollar restrictions as presidential run-off looms
By Jorge Otaola
BUENOS AIRES Oct 27 (Reuters) - Argentina on Tuesday halved the daily amount of dollars companies can transfer abroad without authorization, currency traders said, while the country's insurance regulator put new limits on the amount of hard currency assets insurers can hold.
The moves appeared to stem from the opposition's success in forcing Sunday's presidential election to a run-off vote, which could add to pressure on the central bank to shore up the peso currency as net foreign reserves run precariously low.
A central bank spokesman said he was not aware of the new curb on dollar transfers. But four currency market traders said the central bank had called commercial banks with a verbal directive to slash the daily limit on dollars that a single company can transfer outside Argentina to $75,000 without previous authorization.
"It's a new move that intensifies state controls on the currency. It will have an impact, in particular on importers," said one of the traders, declining to named because he is not authorized to talk to the media.
It was not clear how long the measure would remain in place.
Argentina's dollar crunch has its roots in a legal battle with U.S. creditors over unpaid debt stemming back to its 2002 default on $100 billion dollars that left the country all but locked out of global debt markets.
Outgoing President Cristina Fernandez's government has increasingly had to rely on its reserves to prop up the peso currency, pay for energy imports and meet debt obligations.
In 2011 she imposed capital controls and her leftist government has incrementally turned the screws as reserves run lower. Continuación...