Argentina puts $2000 monthly limit on purchase of dollars

BUENOS AIRES (AFP) - Argentina put a $2,000 monthly limit on the amount of hard currency its citizens will be allowed to purchase, as a new policy went into effect on Monday softening currency restrictions.

Jorge Capitanich, the head of President Cristina Kirchner s cabinet, announced the limits at a press conference, as the policy allowing Argentinians to purchase greenbacks for the first time in more than two years went into effect.

Permission to purchase dollars will be restricted to "working professionals, workers and small business owners," Capitanich said.

The purchase of dollars will be limited to those earning more than 7,200 pesos ($900 dollars) per month he said.

Large businesses and investors will be barred from the hard currency purchases, Capitanich said.

And he added that the transactions will have to be approved by AFIP, the national tax agency.

Capitanich said the government has reversed a decision announced last week to lower a surcharge on dollar purchases from 35 percent surcharge to 20 percent. That surcharge now will remain at 35 percent, he said.

Buenos Aires last week announced it would drop the unpopular measure put in place in 2011 that had restricted Argentinians  access to foreign currency to prevent capital flight.

Last week s decision to ease access to dollars was made after the Argentine peso suffered its worst single-day fall in more than a decade.

Since the beginning of the year, the peso has lost about a fifth of its value, and the measure was seen as a bid to halt that precipitous slide by boosting confidence in the economy.

The recent economic upheaval comes 12 years after Buenos Aires roiled financial markets by defaulting on nearly $100 billion in bonds, unleashing a tidal wave of capital flight and runaway inflation.

Argentines remain traumatized by the 2001 collapse, which wiped out the savings of millions of people from the middle class and saw the end of the peso s fixed exchange rate to the dollar.