Buenos Aires (AFP)

The Argentinian government of Mauricio Macri imposed on Sunday an exchange control to companies and individuals, hoping to reassure markets frightened by the prospect of a default.

These measures, which will remain in effect until December 31, follow a week of market uncertainty and a sharp depreciation of the Argentine currency.

The decree issued Sunday in the Argentine Official Bulletin requires exporting companies to change pesos dollars no later than five business days after receipt, or 180 days after the export of goods.

Individuals may not make transfers abroad of more than $ 10,000, nor purchase foreign currency in excess of this amount without authorization from the Central Bank of Argentina.

However, the government refrained from restricting bank withdrawals, a measure known as "corralito" which, applied at the end of 2001, triggered the worst political and economic crisis in the country's history.

The decree "maintains full freedom to withdraw dollars from bank accounts, does not affect the normal operation of foreign trade and introduces no restrictions on travel," the Central Bank said in a statement.

The government decree mentions "temporary and urgent measures to further regulate the exchange rate and strengthen the normal functioning of the economy".

In Washington, the International Monetary Fund (IMF) said "analyze the details of the measures". The fund "will remain in close contact with the authorities and will continue alongside Argentina in these trying times," said a spokesman for the institution.

The measures announced Sunday are a turnaround for the Liberal government of Mauricio Macri, who since his takeover in 2015 was hostile to any exchange control measures.

In 2017, it had abolished a rule in force for 50 years that forced Argentine exporting companies to change the currencies they cashed into pesos.

The economic crisis worsened in Argentina after Mr Macri's electoral backlash on 11 August.

Center-left Peronist Alberto Fernandez is now a favorite for the presidential election on Oct. 27, after his broad victory in the primary elections where he won 47% of the vote, far ahead of Macri (32%) who is seeking a second term .

- Fear of default -

On Wednesday, Argentina asked the IMF to reschedule its $ 57 billion debt. According to the agreement signed in 2018, the first repayments must occur in 2021.

The Argentinean economy, in recession since 2018, has one of the highest inflations in the world (25.1% between January and July, 54.4% over the last 12 months), a drop in consumption, closures of shops and an increase in poverty (32% in 2018) and unemployment (10.1% this year).

The markets are very worried about the prospect of a change of government at the head of Latin America's third largest economy. The Argentine peso has lost more than 20% since August 11, and nearly 70% since January 2018.

The main fear of the markets and the Argentineans themselves is now the failure to pay.

In 2001, the country, unable to meet the repayment deadlines of its debt, had experienced the largest defaults in history and a serious economic and social crisis that had traumatized Argentineans and financial markets.

© 2019 AFP