Argentina's peso dives after currency controls lifted Thursday Dec 17,2015

 

Argentina's peso has lost about 30% of its value after the country lifted currency controls on Thursday Dec 17,2015

The drop comes after Argentine Finance Minister Alfonso Prat-Gay said he would eliminate the foreign exchange restrictions that have propped up the peso since 2011.

After his announcement, markets opened with one dollar buying 14 pesos.

Analysts had predicted a fall of up to 30% from the previous controlled rate of 9.8 pesos to the dollar.

 

They said they expect it could fall to 14.5 pesos to the dollar. That is the rate at which the currency has been trading on the black market

Argentine Finance Minister Alfonso Prat-Gay said that the country's central bank had been given the right to buy pesos if the exchange rate fell too rapidly.

But he said the restrictions needed to be removed to improve the country's ailing economy. Exchange controls would end for all businesses, who would be allowed to buy as many dollars as they needed.