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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

Liverpool maintain perfect start after beating Chelsea

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Alexander Arnold’s 15th minutes thounderous strike and Firmino effort at Stamford bridge earn Liverpool five points lead over Manchester city.

Liverpool are the first team to win their opening six Premier League games in successive seasons.

After an intensed play, Chelsea have a goal rule out over Var decision, on 71th minutes Ngolo konte score a hard fought goal.

Liverpool fans has loud Adrian over his resilience performance after saving chances from Tammy Abraham, Michy Batshuayi and Mason Mount.

 

 

 

 

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24 Hours Across Africa

Facebook suspends thousands of apps in response to Cambridge Analytica row

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Facebook Inc said, it has suspended tens of thousands of apps on the social networking platform, as part of the company’s ongoing app developer investigation it began in March 2018 in response to the Cambridge Analytica row.

The suspended apps are associated with about 400 developers, Facebook said, adding that it is not necessarily an indication that these apps were posing a threat to users.

Earlier this year, the company agreed to pay a record-breaking $5 billion fine to the U.S. Federal Trade Commission (FTC) to resolve a government probe into its privacy practices.

The FTC privacy probe was triggered last year by allegations that Facebook violated a 2012 consent decree and inappropriately shared information of 87 million users with British political consulting firm Cambridge Analytica.

Facebook has since agreed to boost safeguards on user data and has put curbs on the amount of information that third-party developers can request from platform users.

“… We’re making progress. We won’t catch everything, and some of what we do catch will be with help from others outside Facebook,” the company said in a blogpost.

Source: Reuters

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