BUENOS AIRES, Nov 4 (Reuters) – Argentina’s central bank said on Thursday it ordered local financial institutions to not increase the amount of reserves held in foreign currency this month, amid foreign exchange rate uncertainty ahead of Nov. 14 congressional elections.
Savers have increased dollar purchases as inflation – running at more than 52% per year – pushes people out of the local peso currency. The unofficial exchange rate hit an all-time low of 200 per U.S. dollar earlier on Thursday.
“Financial institutions will have to maintain their global position in foreign currency unchanged until the end of the month,” the bank said in a statement.
The Nov. 14 elections are considered key to the fate of President Alberto Fernandez, who is midway through his first four-year term. His Peronist coalition took a drubbing in the September primaries, raising concern it may lose the ability to command a majority in Congress.
Reporting by Eliana Raszewski, writing by Hugh Bronstein, editing by Richard Pullin