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Argentina Bans US Dollar Savings




According to a Reuters article, Argentina banned the buying of dollars for the purpose of saving them.

Argentines used to invest in US dollars massively in order to keep a hedge against inflation. This meant that they were selling the pesos on a regular basis and creating deposits in the US currency.

Argentina has experienced a dreadful economic crisis in 1999-2002, which included an abrupt national currency devaluation, resulting in bank runs and purchases of US dollars. Back then, the government limited the amount of cash withdrawals from banks and even froze accounts.

For fear of another currency devaluation, the Argentines kept much of their savings in US dollars.

New measures (according to the mentioned Reuters article) require Argentines to buy foreign currency only if they can prove that they're doing it for travel purposes.

Reuters states that the population has resorted to the black market in order to buy foreign currency. In mid 2012, a dollar on the black market cost 5.95 pesos, while the official rate was 4.53 pesos.

In order to exceed the limits, the population is willing to spend more in order to keep their savings in a (considered) safer currency.





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