Argentines withdraw savings in dollars for fear of restrictions

Argentines are withdrawing dollars from bank accounts at the fastest pace in 14 months amid speculation that the government will make it difficult for savers to access their deposits.

Individuals and companies withdrew almost US $ 400 million from the financial system in the first two days of the week, equivalent to 2.5% of deposits, according to the latest data published on the central bank’s website.

The withdrawals followed last week’s new currency restrictions, which hit consumers and banks, fueling rumors that new limits on dollar withdrawals could be around the corner.

“Our clients called us concerned in recent days, because they misunderstood the scope of the latest central bank measures“, said Ariel rivero, operator of Banco CMF in Buenos Aires. “The drop in deposits began with the rumors that spread through social networks. We explain to our clients that the latest resolutions did not affect their savings”.

For many Argentines, the rumors strike a chord almost 20 years after the government imposed restrictions on savings withdrawals just before the country defaulted on the $ 95 billion payment.

The central bank issued a notice on Monday saying that its measures from the previous week did not affect dollar deposits and that all foreign currency savings are asset-backed.

The latest measures come at a time when authorities are expected to intensify negotiations with the International Monetary Fund for more than $ 40 billion in payments due. The central bank’s gross reserves have fallen $ 4.5 billion since a peak in August, when the government received additional funding from the IMF in the form of special drawing rights.

“The weakness of net reserves and the low level of credibility of policy makers are fuel elements for any unfounded rumor to cause a fire“, said Nery Persichini, strategy director of GMA Capital.