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Argentinean peso drops 30 percent against U.S. dollar after end to capital controls

Xinhua, December 18, 2015 Adjust font size:

The Argentinean peso dropped by 30 percent against the U.S. dollar Thursday, one day after the government of Argentina announced a decision to scrap capital controls on foreign currency.

At the end of Wednesday, the peso was selling at 9.84 per U.S. dollar but stood at 14 at the end of Thursday, after rising as high as 15 earlier in the day, representing a swing of 52 percent.

The administration of President Mauricio Macri, who was sworn in one week ago, blasted the controls put in place by the government of Cristina Fernandez de Kirchner, Macri's predecessor, for artificially inflating salaries.

On Thursday, Minister of Revenue and Finance Alfonso Prat Gay stated that the market was operating "calmly" after the controls were lifted.

His comments were backed by Argentinean experts, with Sergio Fares, director of foreign exchange company Transcambio, saying "the market ... was registering normal and routine operations."

Furthermore, Argentineans did not appear to be making a run on the greenback, with only 11 percent of people who said they were planning to buy U.S. dollars Thursday in a poll by the La Nacion newspaper.

There are concerns, hower, that should this devaluation continue, people will resort to buying U.S. dollars on the black market. Endit