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BUENOS AIRES – The Argentine government imposed capital controls in its latest bid in order to avoid the depletion of foreign currency reserves in the context of a crisis of confidence that fueled the dollar outflows and the turbulence of the financial markets.
The unexpected move, which comes into effect on Monday, follows President Mauricio Macri's request last week to extend the maturity of all short-term securities unilaterally, after he is unable to cancel its obligations due to falling demand for public debt.
"This is Macri's last game of chance to regain control of the situation," said MatÃas Carugati, an Argentinian economist. "The times are very difficult and people start to panic. It is not surprising that the government is working on the fly and that improvisation has costs. "
The central bank sold dollars at a faster pace to contain a sharp depreciation of the Argentine peso. Carugati said reserves have fallen by $ 12.2 billion since Aug. 9, about 20 percent of foreign currency reserves. The peso
USDARS, + 0.4186%
has lost more than 20% of its value since Macri suffered a crushing setback in the main vote on August 11th.
A developed version of this story is available on WSJ.com
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