Argentina tightens currency controls after Fernandez wins

Bloomberg

Argentina tightened currency controls after the opposition’s Alberto Fernandez won the presidential elections.
The central bank will restrict dollar purchases by savers to buy just $200 per month compared with the $10,000 per month previously, according to a central bank statement.
The move looks to preserve international reserves during the political transition which will culminate in the handover on December 10 but risks causing the black market exchange rate to skyrocket. Argentines rushed to buy dollars and withdraw deposits ahead of the vote on concern that more controls were coming amid an economic crisis.
“Restricting dollar purchases in Argentina probably won’t ease pressure on the peso, with the weaker bias for the currency likely
to continue,” said Toru Nishihama, emerging-market economist at Dai-ichi Life Research Institute in Tokyo.
“Concerns about a potential default and deterioration of the nation’s fiscal condition will linger.”
Macri imposed capital controls at the beginning of September after the peso plunged following August primaries in which Fernandez trounced the incumbent by 16 points. Reserves continued falling amid capital controls and now stand at $43.5 billion.
Argentina’s bonds are trading in deep distressed territory, about 40 cents on the dollar, and the government has said it wants to extend maturities both with private creditors and the IMF.