Argentina Limits Credit Card Transactions Abroad

RIO DE JANEIRO, BRAZIL – The goal is to prevent the flight of dollars and preserve the country’s reserves, which have been reduced by approximately US$23 billion since August this year when the primary elections were held.

On Thursday, October 31st, the country’s Central Bank’s reserves closed at US$43 billion.

The limit also applies to gambling and betting operations, transfers to payment service funds (PayPal, for instance), transfers to foreign investment accounts, the purchase of cryptocurrencies and foreign exchange operations.

Despite the limit of US$50 per withdrawal on credit cards abroad, the Central Bank has not set limits on the number of transactions.

The trouble is that for each withdrawal, citizens pay commissions and interest corresponding to each operation since it is a purchase on credit, which is very expensive. In addition, a fee is also paid for networks abroad, which are charged per operation.

Earlier this week, in the wake of Alberto Fernández’s election to the presidency of Argentina, the country’s Central Bank had announced a reduction in the purchase of dollars. In September, Argentinians could buy up to US$10,000 a month. Last Monday, October 28th, the amount was reduced to US$200 a month.

According to Central Bank President Guido Sandleris, these measures aimed to “preserve reserves during this transition period until the new government defines its economic policy and the uncertainty is dispelled”.

“Financial institutions and other local card issuers must have the prior approval of the Central Bank to access the foreign exchange market to make payments abroad for the use of credit, debit or prepaid cards issued in the country,” the Central Bank statement said.

Last year, Argentina was granted a US$57 billion loan from the International Monetary Fund (IMF) in exchange for fiscal adjustment measures. The country has already been granted US$44 billion, and the IMF decided to wait for the election results before disbursing a US$5.4 billion tranche, previously scheduled for September.

Source: Agência Brasil