Days before the October 22 election, the Central Bank imposed new restrictions on banks and importers’ operations in US dollars amid an international reserve scarcity crisis and a run against the peso that took the informal exchange rate to AR$1,000 to the dollar.

Starting on Friday and until October 31, banks cannot increase their daily cash position in foreign currency. They will be able to cover it totally or partially with an untransferable short-term bond from the Central Bank that can be settled at the official exchange rate.

“The same thing happened in the 2021 elections,” an official source told the Herald.

This restriction was implemented by resolution “A” 7863 published Thursday. It does not refer to savers’ US dollars, but to the bank’s own dollars, an official source told the Herald. “Savers’ dollars are backed up by the Central Bank, nobody can touch them,” the source added.

“There have been several [currency] runs, and savers have never had any problems to withdraw [their dollars].”

However, it is expected that banks will offer fewer US dollars while the measure is in place.

Another resolution the Central Bank imposed on Thursday, coded “A” 7864, also strikes down an exception that certain companies had when requesting dollars for importing services at the official exchange rate. 

The System for Imports and Service Payments Abroad (SIRASE, by its Spanish initials) is an electronic procedure importers have to fill out when paying for services abroad in foreign currency. It was enforced in October 2022. When authorized, the Central Bank allows businesses to buy US dollars at the official exchange rate, AR$350 per unit at the time of writing.

There were some exceptions, mainly for state companies. This new resolution eliminated some of those exceptions, namely the ones that were in place for the public sector, business organizations in which the government has a majority participation in capital or corporate decisions, as well as trusts constituted with contributions from the national public sector. They all have to go through the SIRASE now.

The new measure also requires a SIRA (the same system as SIRASEs, only for importing goods) to be authorized to immediately access U.S. dollars in order to import medical supplies and materials for public works.

After accumulating purchases for US$527 million in September, the Central Bank sold US$693 million in the first nine rounds of October, accumulating a negative balance of almost US$2.5 billion for the year, according to consultancy Ecolatina.

Agricultural settlements plummeted in October despite the extension of the “soybean dollar”: they averaged only US$85 million, 70% below the September mark.

Reserves keep falling since the government continues to use U.S. dollars to contain the exchange rate gap in the secondary bond market. Net reserves are negative US$6.5 billion, according to Ecolatina. The traditional pre-electoral portfolio dollarization and some candidates’ explosive proposals also provide an added source of pressure.