On Friday night, the Central Bank of Argentina (BCRA) announced the lifting of currency controls for individuals, together with a new floating system for the official dollar in a range from $1,000 to $1,400 pesos. Continued currency restrictions are still applicable for companies, and appeared to be aimed at preventing an increase in financial dollarization in the lead-up to the midterm elections. This lifting of currency controls for individuals comes alongside the agreement with the IMF, financing from other international credit institutions, and the implementation of exchange rate bands.
For the moment, the financial dolar (CCL – “contado con liqui”) continues to exist for companies unable to operate in the free market, but with lower transaction volumes. Even if the CCL survives, the gap is not expected to exceed the 5% mark, and in practice prices will be similar to the free market dollar, meaning a virtual unification of exchange rates.
