In the early hours of Monday morning in Buenos Aires, before banks had opened their doors, winding lines of customers waited to withdraw savings after Argentina’s government imposed capital controls restricting dollar purchases and transfers.
Accustomed to economic turmoil that has led to restrictions in accessing their savings in the past, Argentines are historically quick to opt out of banks and instead stash their cash at home at the first signs of a currency clampdown.
“This is a time when we are getting a lot of surprises. Tomorrow we might wake up and see that everything has changed,” said college student and part-time worker Catalina Pedace, 25, as she waited in line outside a bank in downtown Buenos Aires.
“I prefer to be cautious and not regret it later.”
In the crises of 1989-90 and 2001-02, many Argentines were blocked from withdrawing their money in “corralitos,” a local term that refers to banks restricting withdrawals.
In the 2001-02 crisis, riots broke out, supermarkets were looted and angry depositors vandalized bank ATMs.
The current economic crisis has not yet sparked civil disobedience, but it took a turn for the worse after the Aug. 11 primary election, when opposition candidate Alberto Fernandez trounced President Mauricio Macri in the polls, spooking markets on fears of a return to interventionist policies.
The primary results triggered a collapse in investor confidence and sent stocks, bonds and the peso currency tumbling. The peso currency has lost almost a quarter of its value compared with the dollar since the vote.
Scrambling to react, Mr. Macri announced changes to Argentina’s bond payment schedule last week.
Then on Sunday he authorized currency controls, a stunning about-turn for the pro-business leader who had formerly pledged to reverse the protectionist policies of his predecessor, former president Cristina Fernandez de Kirchner.
Argentine bond prices fell to record lows on Monday in response, and the official and black market peso exchange rates diverged.
The new measures restrict people from buying more than US$10,000 a month, or making transfers exceeding that amount a month, although they do not limit them from withdrawing money from their accounts, the central bank said.
“The instability and the lack of information generate fear, and I think that many of us are acting because of that fear of not knowing what could happen,” Ms. Pedace said.
Bank officials Reuters spoke to agreed. “This influx of people is fundamentally down to the new package of measures that have been taking place in the financial system,” a representative for a large Argentine bank said, asking not to be named.
Outside the banks, customers complained about the long lines and problems with digital-banking systems that prevented them from making some online transactions on Monday.
“All the systems are down. There are so many people that you can’t even walk through,” Pablo Ferro, a 41-year-old lawyer, said.
According to central-bank data, the deposit drain started even before the government announced the new currency controls. Bank deposits in dollars fell to US$31.55-billion on Aug. 27, compared with US$35.24-billion before the primary election.
“I have no dollars deposited. I have savings in dollars that are not in the bank, because two years ago I began to get a whiff of this situation,” said Liliana Ibarra, 60, a retiree.
“But it worries me and I am sorry to see all these people outside the banks waiting to take out their money.”