Last resort seeks to avoid the epidemic | Against …

The government has put in place capital controls and limited the sale of dollars as part of another attempt to contain the exchange rate that is shaking the Argentine economy. The emergency exchange rules were implemented by a decree signed by President Mauricio Macri, which has already entered into force. Instruments for managing capital flight limit the purchase of foreign currency in the amount of $ 10,000 per month for cash, block the surrender of corporate profits and force exporters to liquidate the dollars of their operations in the United States. up to 5 working days The regulations of the Central Bank provide that the tools will be valid until the end of the year. With the late replacement of some of the foreign exchange market management mechanisms that existed until 2015 and the mandatory restructuring of the very short-term debt that increases the maturity of the next government, the government hopes to guarantee the availability of dollars that will allow him to finalize the mandate without further shocks on the price of the US currency. None of the measures announced contain the financial capital rush.

Those responsible for implementing controls admit that the financial crisis has generated panic among small savers and therefore insist that there will be no restrictions on withdrawing dollars from banks. As reinsurance, they allow financial institutions to extend opening hours to the public until 5 pm, although the decision depends on each bank. The speed of withdrawal of deposits from the banking system that will accompany Sunday announcements will depend on the ability of each entity to provide orders in its various branches. Some of the instruments announced Sunday were part of the foreign exchange management mechanisms used to address the dollar shortage under the previous government. The famous dismantling of financial and regulatory regulations demonized over exchange rates recorded since the beginning of the administration The change exacerbated the external fragility of the Argentine economy until it was on the point of collapse.

The president of the central bank, Guido Sandleris, and the head of the Treasury Palace, Hernán Lacunza, are responsible for informing the bankers and businessmen of the measures taken. The officials reported the measures to the staff of the International Monetary Fund and had an interview with the economic referents of the Frente de Todos. The official diagnosis is that with the price of the dollar for clouds and a policy of drowning, the various exchange controls should guarantee a relaxation to avoid an epidemic.

* Restrictions for the purchase of foreign currency: Starting this Monday, individuals will only be able to buy up to $ 10,000 a month. Any transaction to exceed this amount, such as the purchase of dollars to finalize the acquisition of real estate, requires the authorization of the BCRA. Those interested in crossing the threshold must justify what these dollars require from their bank and it will seek regulatory approval. Official statistics show that ticket purchases of up to $ 10,000 in July accounted for 69% of total transactions. In May 2016, the monetary authority raised the ceiling of the purchase of dollars from 2 to 5 million euros and three months later, it announced the definitive deletion of the ceilings ("l & # 39; 39, one of the last steps in removing inherited exchange restrictions, depending on the path you have covered. started with the release of the stocks, "said the BCRA in its statement.) The ceiling for sending foreign currency to accounts abroad will be $ 10,000 for individuals. this ceiling, an authorization will be required.There are no restrictions for operations carried out abroad.

* Dollar accounts and extended hours in banks: The measures announced, the government stresses, do not provide any restrictions for the extraction of dollars and pesos on bank accounts. Recognizing that the panic caused by the worsening crisis had led many people to withdraw their savings, it was decided to extend banking hours from 10:00 to 17:00 in September. The measure will be evaluated and implemented at the discretion of each financial entity. Foreign entities are most interested in the extension of terms. The authorities recognize that bank employees should be compensated for overtime.

* Controls at the purchase of dollars from large companies: The BCRA has decided not to sell more dollars to companies to cherish them without a specific destination. Transactions intended to finance imports and the payment of debts in foreign currencies do not require any type of authorization. When businesses want to buy money to save, regardless of the amount, they must apply for authorization. No additional measures have been announced to prevent the flight of capital during simulated or inflated import operations.

* Benefits and dividends: The transfer of profits to parent companies will be subject to the approval of the Central Bank. Companies can no longer send earnings and dividends automatically, but must obtain prior approval from the monetary authority. Financial institutions were affected by similar regulations last week. The external accounts show that many companies have anticipated the measures and accelerated the return of their profits abroad.

* Who and how is the sale of dollars defined above the limits ?: The revival of the exchange control will be accompanied by the revitalization of the management of the exchanges and the exchanges of the BCRA, although this one has an updated name in the official rhetoric. The parameters they will use to define which companies can transfer profits abroad or who can acquire more than $ 10,000 per month are not established.

* Liquidation of export dollars: After allowing exporters not to enter government-generated dollars, it decided to set deadlines for the liquidation of these currencies on the local exchange market. To increase the dollar bid, companies will have to sell the export-generated tickets within 5 business days of pickup or 180 calendar days after the boarding permit (whichever is shorter). In the case of the agro-export sector and the rest of the products, the deadline will be 15 days. The regulation aims to increase the supply of foreign currency. The provision adds to the timid and innocuous attempt announced last week by the BCRA for grain companies to come in dollars.

* Options for companies victims of the unilateral restructuring of short-term bills: Instead of charging 15% of their loans by the due date and waiting for up to six months to recover, at the time of maturity of their holdings in Letes, Lecaps, Lecer or Lelinks companies can use to cancel their outstanding debts. In other words, use default credit to pay late debts to the social security system. Some errors in the announcement made Wednesday, jeopardizing the operation of mutual funds, were also corrected. The regulation also provides for restrictions for banks wishing to conduct liquidation maneuvers.