translated from Spanish: Argentina’s central bank banned banks from spinning dividends without prior authorization

In the midst of a sharp drop in its level of reserves due to electoral uncertainty, the Central Bank of Argentina prohibited financial institutions from distributing dividends without their prior authorization. The monetary authority released its resolution on Friday. A Central Bank source, who asked not to be identified as not being authorized to speak to the press, told The Associated Press that “the measure seeks to ensure the liquidity of the financial system so that there is availability (of money) in the face of a possible increase in (from savers) for the moment of uncertainty that the country is going through.” This restriction was in force between 2006 and 2018, clarified the source. “It only applies to financial institutions,” he added. The move was taken against a backdrop of growing instability in the foreign exchange market that has impacted on the level of reserves of the South American country following the outcome of the 11 August primaries, in which the Kirchnerista opposition Alberto Fernández overtook more 15 points to conservative President Mauricio Macri, who seeks re-election. The Central Bank’s international reserves fell $8,783 million since the bank was forced to deepen its change market intervention on 12 August to curb the depreciation of the peso of more than 30% after the primaries. Fernandez prevailed in the primaries with 49.49% of Macri’s votes over 32.94%, a result that will hardly be reversed in the general election of 27 October. Investors, who were betting on the re-election of the representative, reacted a fear of the eventual return of the interventionist policies of the Kirchnergovernment government between 2003 and 2015.

Original source in Spanish