Argentine Central Bank Suspends Dollar Reserve Requirement

Argentina’s central bank suspended the minimum reserve requirement on dollar deposits for two months as savers accelerated withdrawals of savings after the government tightened controls on the foreign exchange market.

The suspension, which will free up dollars for the banks, lasts from June 1 to July 31, the bank said on its website.

Dollar withdrawals quickened since Fernandez, who was re- elected in October, restricted purchases of foreign currency to stem record capital outflow that was draining central bank reserves. Since November, Argentines need approval from the tax agency to buy dollars or other currencies. From last month, those who want to buy foreign currency to travel abroad must submit details of the itinerary, estimated cost and purpose of the trip.

Private dollar deposits fell to $11 billion on May 24 from $12.1 billion at the beginning of the year, according to the latest data from the central bank. Central bank reserves fell to $46.7 billion yesterday, the lowest level in three months.

Argentina’s peso, which has weakened 4.1 percent this year, was little changed as of 9 a.m. New York time at 4.4835 pesos per dollar.

To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.