Will Macri’s currency controls stop the dollar leakage?
During his 2015 presidential campaign, Mauricio Macri and his economic team told everyone who asked that the ban on foreign currency trade imposed by Kirchnerismo would be very easy to lift, promising to do so on day one of his presidency, in contrast to other candidates who argued this could be harder.
After becoming elected, Macri delivered within his first week in charge, using high interest rates and foreign currency loans to make sure that the lifting of the restrictions would not result in a run against the peso.
But luck has turned for the country’s leader since his ease to raise debt in global markets disappeared in 2018. And despite resisting up to the last minute before announcing the return of the dreaded “cepo,” Macri finally gave up. On Sunday, his government re-imposed a ban on companies to buy dollars with their pesos, moving forward with what he continues to believe is a bad idea.