Argentina is attempting to stave off a deepening financial crisis by imposing strict currency controls on the peso.
Foreign currency exchange is being tightened and businesses will need government permission to transfer money overseas, sell pesos or buy foreign currency.
The move follows a falling trend in the value of the peso against the US dollar, which has dropped from around 58 pesos to the dollar to 55.8 pesos to the dollar in the past couple of days.
Argentina is also urgently asking the International Monetary Fund to suspend debt payments until the financial crisis eases.
The central bank says the measures are needed to maintain currency stability, while the government issued a statement saying: “It was necessary to adopt “a series of extraordinary measures to ensure the normal functioning of the economy, to sustain the level of activity and employment and protect the consumers.”
The restrictions are slated to stay in place until the end of the year.
Under the new regulations, individuals can still buy US dollars, but they need permission to purchase more than $10,000 in any month.
Argentina has a chequered history of poor financial management going back years.
The current crisis was worsened when the government was defeated in a recent election.
The country has one of the worst global inflation rates, with the cost of living rising by around 22% a month. The economy has retracted by nearly 6% in the first three months of the year, after shrinking by 2.5% last year.
Expats are advised to move their pesos into US dollars as soon as possible as the emergency restrictions may become even stricter if they have no effect on the economy and the value of the peso.
All US dollar withdrawals were banned in 2001 for a year.
The underlying issue that needs addressing is the country cannot afford to service debt to the USA and IMF.
The IMF has helped by giving the country more time to repay loans, which reduces the amount paid each month.
But if the US dollar keeps strengthening, Argentina’s economy will suffer.