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Argentina imposes currency controls to support economy

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Argentina has imposed currency controls in an attempt to stabilise markets as the country faces a deepening financial crisis.

The government will restrict foreign currency purchases following a sharp drop in the value of the peso.

Firms will have to seek central bank permission to sell pesos to buy foreign currency and to make transfers abroad.

Argentina is also seeking to defer debt payments to the International Monetary Fund (IMF) to deal with the crisis.

IMF and Argentina lending history

What has the government said?

In an official bulletin issued on Sunday, the government said that it was necessary to adopt “a series of extraordinary measures to ensure the normal functioning of the economy, to sustain the level of activity and employment and protect the consumers”.

The central bank said the measures were intended to “maintain currency stability”.

It also said that while individuals can continue to buy US dollars, they will need to seek permission to purchase more than $10,000 (£8,223.50) a month.

The measures will apply until the end of this year.

What triggered the current crisis?

Argentina has been struggling with a financial crisis, which was exacerbated by the president’s defeat in a recent primary poll.

The peso fell to a record low last month after the vote showed that the business-friendly government of President Mauricio Macri is likely to be ousted in elections in October.

Peso vs US Dollar

Mr Macri was elected in 2015 on promises to boost Argentina’s economy with a raft of liberal economic reforms.

But the country is in a deep recession. It has one of the world’s highest inflation rates, running at 22% during the first half of the year.

Argentina’s economy contracted by 5.8% in the first quarter of 2019, after shrinking 2.5% last year. Three million people have fallen into poverty over the past year.

How is the move likely to be received?

Ordinary Argentines have traditionally had little faith in their own currency, preferring to convert their spare pesos into dollars as soon as possible

They don’t trust financial institutions much either, so they resort to what is locally known as the “colchón bank” – that is, stuffing their dollars under the mattress.

Anecdotal stories abound of people keeping money buried in the garden, hidden in the walls or even stuffed in heating systems – occasionally with disastrous consequences if there is an unexpected cold snap.

When you consider Argentina’s history of rampant inflation and currency volatility, they arguably have a point.

But it does mean that any restrictions on people’s ability to buy dollars have an enormous psychological impact.

BBC

 

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24 Hours Across Africa

Tottenham appoint Mourinho as New Coach

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Tottenham Hotspur had experienced a woeful start in their domestic league, the club board of directors has terminated Mauricio Pochettino four years deal.

Jose Mourinho signed a three-year contract until the end of the 2022/23 season.

Tottenham sit 14th in England’s top flight after picking up just three wins from their opening 12 games and were eliminated from the League Cup in September by fourth-tier Colchester United.

Speaking on his appointment, Mourinho said: “I am excited to be joining a club with such a great heritage and such passionate supporters. The quality in both the squad and the academy excites me. Working with these players is what has attracted me.”

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24 Hours Across Africa

Brazil win U17 World cup after beating Mexico

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Brazil bags another remarkable win to tally its Under-17 World Cup trophy by beating Mexico.

The host team, Brazil leaves it late to triumphed a 2-1 win at the Bezerrao stadium.

thanks to Lazaro Vinicius Marques’ 93rd-minute goal to made the difference.

Mexico – winners of the showpiece tournament in 2005 and 2011 – looked on track to add a third title to their collection when Bryan Alonso Gonzalez Olivan headed home the opener in the 66th minute.

But Brazil, playing in front of legends Ronaldo and Cafu, rallied courtesy of Kaio Jorge’s questionable penalty with six minutes of regulation time remaining.

Brazil then completed the comeback deep into stoppage time when Lazaro volleyed home a last-gasp winner.

The victory added to Brazil’s successes in 1997, 1999 and 2003 as they moved within one of Nigeria’s record of five championships.

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