BUENOS AIRES, Argentina -- The Argentine government announced on Dec. 1 that it had set limits on the amount of cash that can be withdrawn or sent abroad in an effort to halt a run on its banks, according to an Associated Press report.
The regulations, which were announced by Economy Minister Domingo Cavallo. will last for 90 days. Cash withdrawals will be capped at $250 a week and transfers abroad restricted to $1,000 a month. Argentines can continue to access the rest of their savings using debit cards, credit cards or checks.
Many ATMs in Buenos Aires stopped dispensing dollars on Dec. 1 according to the report.
The announcement came one day after thousands of Argentines lined up to withdraw their savings from banks amid deepening fears their accounts would be frozen. Banking officials hope the measures will end the steady withdrawals of the past few weeks and prevent a collapse of the peso.
The country's stock market fell to a 10-year low last week as Argentines pulled their savings from banks. The withdrawals also continued a monthslong slide in bank deposits. Banks in Argentina have lost a total of $14.5 billion, or 17 percent of their deposits, since January.
The country's economy is in its 42nd month of recession.
The Argentine peso has been pegged one-to-one with the dollar since 1991, but the system is based on having the same number of pesos in circulation as dollars in reserve. The heavy withdrawals of dollars - nearly $700 million on Nov. 30 alone - upsets the currency balance and threatens the value of the peso.
Twelve years ago, then-President Carlos Menem froze bank deposits to stem a run on the banks as hyperinflation and economic chaos enveloped the country.
