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Argentina Limits Daily Financial Transaction Per Person To 1,000 Pesos (230 Dollars)


Asheron
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The government will restrict daily cash transactions to 1.000 Pesos (231 US dollars) per person, down from 10.000 Pesos, according to a statement in the Official Gazette. The measure affects activity in the stock and bond markets, investment funds and in the futures markets. Operations above the limit will have to be done through Argentine bank accounts that are authorized by the central bank.

“They are forcing a higher level of formality in the economy, as cash transactions allow more irregularities,” said Felipe Hernandez, an analyst at RBS Securities Inc. in Stamford, Connecticut. “This is in line with other measures to prevent money laundering, for which the government has been under a great deal of pressure.”

The move is aimed at combating money laundering and terrorist financing, according to the statement in the Official Gazette.

Since winning a second, four-year term in October, Cristina Fernandez has ordered the tax agency to review all foreign currency transactions, required pre-approval for the importation of goods and raised capital requirement on banks in a bid to limit dividends and slow capital flight.

Outflows totalled 18 billion collars in the first nine months of 2011, double the same period in the previous year, and accelerated to the fastest pace in at least a decade in the third quarter. The Argentine government measures have slowed outflows, allowing the central bank to rebuild its international reserves.

Confirming the impact of the latest measures trading in Argentina's foreign- exchange market has plunged to a five-year low, down 47% last month from a year earlier to 3.8 billion dollars, lowest since October 2006.

Volume in the foreign-exchange market dropped to 5.2bn in October and 4.4bn in November from 7.1bn in September, after the Cristina Fernandez administration required companies and individuals to get authorization from the tax agency to purchase dollars.

The government also made trading in the unregulated currency market a crime punishable by as long as eight years in prison as part of an anti-terrorism law.

The measures have allowed the central bank to buy a record amount of dollars, injecting pesos into the economy and pushing the benchmark bank deposit rate down 525 basis points, or 5.25 percentage points, to 14.75% since CFK won a second term.

http://en.mercopress.com/2012/02/09/argentina-limits-daily-financial-transaction-per-person-to-1.000-pesos-230-dollars?utm_source=newsletter&utm_medium=email&utm_campaign=daily

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The move is aimed at combating money laundering and terrorist financing, according to the statement in the Official Gazette.

The real inflation rate in Argentina is around 28%, the government fabricates the figures to show 5%. So people convert to USD to protect against inflation and government instigated devaluation. This makes them terrorists.

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