Roundup: New Argentine gov't scraps foreign currency controls

The new Argentine government announced a flurry of economic measures on Wednesday, including eliminating the four-year-old foreign currency controls.

The measures were one of the campaign promises made by President Mauricio Macri, who came to office a week ago.

"We've come to announce the end to foreign currency controls in Argentina," Finance Minister Alfonso Prat-Gay told a press conference.

"Starting tomorrow, there will be no limits on acquiring foreign currency for imports. Anyone who wants to buy foreign currency will be able to do so through his bank account or in cash at exchange houses. This is a return to normality," added Prat-Gay.

"We will return to the foreign exchange regulations that were in place prior to the implementation of the controls in November 2011," when the cap on purchasing U.S. dollars was at 2 million per person or entity per month, explained the minister.

The official peso-dollar exchange rate closed Wednesday at 9.835, while the street rate was 14.57, state news agency Telam reported.

Prat-Gay declined to predict what the rate would be on Thursday following the announcement of the measures, but indicated the unofficial rate was "the most representative."

Argentina is also working to secure between 15 and 25 billion U.S. dollars in credit over the next four weeks to bolster its foreign currency reserves, Telam reported.

To that end, Argentina's central bank was negotiating with various foreign banks, including China's central bank, said the minister.

"We inherited a complex situation. We are starting to work it out," said Prat-Gay.

Also on Wednesday, Macri announced the elimination of export taxes on key exports such as wheat, corn, beef and sorghum.

Not everyone was happy about the changes.

According to Telam, Nicolas del Cano, the former presidential candidate for the Workers' Leftist Front, said via Twitter that axing the tax on agricultural exports only served to allow "the agricultural oligarchy to fill their pockets."

In November 2011, shortly after winning her second presidential mandate, Macri's predecessor Cristina Fernandez de Kirchner put in place strict controls that forced companies and individuals to seek permission before acquiring any foreign currency.

In February 2012, she added further controls stipulating that Argentine companies earning foreign currencies abroad had to transfer these proceeds back to Argentina and sell them on the foreign exchange market.

Further controls had restricted the amount of foreign currency Argentines could withdraw abroad with debit cards and had sought to prevent foreign currencies being spent abroad by travel agents booking tours.

Controls were further tightened in August 2013, with Argentines only being able to buy foreign currencies a week before they traveled and only in the currency of the country of destination. A tax of 15 percent was levied on cross-border e-commerce transactions and the use of foreign currencies in real estate transactions was banned.

These controls had been very unpopular with foreign companies.

Kirchner defended the controls, saying they were needed to protect dwindling foreign reserves.

The pro-business Macri has said that returning to an open and free market is the best way to reverse Argentina's economic fortunes. Endi