Latin America & Caribbean

Argentina's President Fernandez stops saving in dollars

Argentine President Cristina Fernandez - file photo
Image caption President Fernandez said saving in pesos was more profitable

Argentine President Cristina Fernandez says she is switching her personal savings from the US dollar to the Argentine peso.

She said she would move her only remaining dollar account and urged officials to do the same.

High inflation, officially at 9.8% but unofficially at about 25%, means many Argentines see dollars as a safe bet.

The government, which needs dollars to maintain central bank reserves, is also trying to curb capital flight.

"I've just had one fixed term account in dollars for some time," President Fernandez said on Wednesday.

"And I've decided to put it in pesos, it's more profitable to have it in pesos."

Economic crises in Argentina's recent history mean many view the US dollar as a safe haven, and some keep part of their wealth outside the country.

Savers also have memories of tight controls on bank withdrawals and a sharp devaluation of the currency.

Last November, the government imposed new exchange controls.

People wanting to buy dollars have to give their national identity and tax number, which must then be approved by the national tax agency (AFIP) before the transaction can go ahead.

And this month further restrictions took effect.

Argentines wanting to travel abroad must prove their money was obtained legally and tell the tax agency when and where they are going, and why.

The government's measures have slowed capital flight which last year totalled more than $21bn (£13.5bn).

But high inflation is eroding confidence in the peso, analysts say.

And with more controls in place, Argentines are increasingly resorting to the informal currency market to obtain dollars.

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