October 28, 2019 / 12:07 PM / 18 days ago

Argentine cenbank will do all possible to protect reserves: Sandleris

Argentina's central bank chief Guido Sandleris attends a news conference after Peronist challenger Alberto Fernandez defeated incumbent Mauricio Macri in the presidential election, in Buenos Aires, Argentina October 28, 2019. REUTERS/Ricardo Moraes

BUENOS AIRES (Reuters) - Argentina central bank president Guido Sandleris pledged on Monday to do everything possible to protect the bank’s international reserves, as the South American country transitions to a new leftist government amid swirling economic crisis.

Sandleris said during a press conference that the central bank will hold meetings with the team of President-elect Alberto Fernandez, who defeated incumbent Mauricio Macri in Sunday’s presidential election, in order to help with a smooth transition.

In the early hours of Monday, the central bank announced it would tighten a restriction on dollar purchasing to $200 per month for individuals, down from $10,000 a month, until December, when the new government will be in place.

The move is meant to reduce dollar demand and stabilize the peso’s exchange rate, Sandleris said.

“I know this measure, even though temporary, is very strict and affects many people. Its purpose is to preserve reserves during this transition period, until the new government defines its economic policies and the uncertainty dissipates,” Sandleris said.

The central bank has spent about $22 billion in reserves to defend the peso since the Aug. 11 primary election after it lost about a quarter of its value that month, Sandleris said.

The bank first imposed currency controls at the beginning of September to stem the slide on the peso, sparked by a shock landslide defeat suffered by conservative leader Macri against Fernandez in the Aug. 11 primary election.

The new measures announced Monday were expected to help keep the peso stable when Argentina’s local market opens, but would likely set off more volatility in the black market peso exchange rate of informally traded dollars, economists said.

Reporting by Jorge Otaola and Walter Bianchi; writing by Cassandra Garrison; Editing by Chizu Nomiyama

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