It has also decided to restrict large export companies' access to
Argentine peso in an effort to make them sell dollars.
ARGENTINE PESO RISES AFTER CAPITAL CONTROLS Argentina's peso strengthened yesterday after the government imposed capital controls over the weekend to try to prevent the country's latest debt crisis from spiralling.
In Argentina, imports contracted by 6.4 per cent, to levels one-third below recent highs, as the
Argentine peso depreciated by 12.5 per cent against the US dollar (86.7 per cent over the last 4 quarters).
Weakening currency: The
Argentine peso falls by one-third against the dollar, euro, gold and other assets.
Release date- 13082019 - The
Argentine Peso depreciation and negative market reaction to candidate Alberto Fernandez's primary victory on Sunday raises near to medium-term refinancing risk for the country's electric utilities and increases the possibility of pesification of contract rates, says Fitch Ratings.
"We expect a significant sell-off in EXD (hard currency) assets and heavy pressure in ARS (
Argentine peso) with a potential devaluation in coming weeks," they said in a note.
In addition, we expect a reduction in the negative impact of the
Argentine peso as inflation-driven price increases exceed projected devaluation in that country.
Meanwhile in Argentina, revenue dropped significantly due to the devaluation of the
Argentine peso, as well as limited funds available for working capital purposes.
For instance, at the height of the struggles, Argentina faced with stabilising its currency, the IMF extended a loan package of about US$57 billion to them, and approved a daily auction of about US$60 million by the Central Bank to defend the
Argentine Peso.
Deutsche Bank observed that the US dollar has strengthened against all currencies except the Egyptian pound in the past 12 months, with the biggest losers of the 42 currencies being the Turkish Lira (-31 per cent) and the
Argentine Peso (-55 per cent).
The increase in leverage is due to the sharp currency depreciation of the
Argentine peso against the U.S.
Other emerging market currencies like
Argentine peso, Turkish lira and Indonesian rupiah also took a hit.
