Argentina’s central bank (CB) is implementing stern measures to control foreign exchange (forex) reserves. Banco Central de la Republica Argentina (BCRA) announced on Monday it would sharply cut the amount of dollars individuals could purchase.

This measure amid concerns over outflows of foreign exchange reserves accelerating after President Mauricio Macri was voted out of power on Sunday.

Guido Sandleris, central bank chief, held a press conference to explain the details of the measure.

The bank would restrict dollar purchases to $200 per month via bank account and just $100 each month in cash, until December, a dramatic adjustment from the $10,000 restriction the bank imposed at the beginning of September along with other currency controls to stem a slide in the peso.

“Given the current degree of uncertainty, the board of the BCRA has decided to take a series of measures this Sunday that seek to preserve the reserves of the Central Bank,” the entity said in a statement.

Argentina’s Peronists earlier swept back into power on Sunday, ousting conservative Mauricio Macri in an election result that puts Latin America’s third biggest economy back under the control of a more leftist government after it was battered by economic crisis.

The country has been grappling with frenzied markets since an August primary election vote where Peronist candidate Alberto Fernandez - now president-elect — soundly beat Macri, sparking a sell-off of the local peso currency, bonds and equities.

The sharp peso slide prompted the Macri’s administration to roll out capital controls to protect the currency, including imposing caps on dollar purchases. Foreign reserves have nonetheless tumbled by over $20 billion since.

Argentina’s dollar bonds fell on Monday after President Mauricio Macri was ousted in an election by Peronist rival Alberto Fernandez.

The benchmark international 2028 dollar bond dropped 1.3 cents to 39.33 cents in the dollar, according to Refinitiv data.

Meanwhile, Argentina’s farmers have some questions for President-elect Alberto Fernandez, after the center-left Peronist won a decisive election on Sunday, ousting business-friendly leader Mauricio Macri.

Across the country’s fertile Pampas grains belt, with vast fields of soybeans, corn, wheat and cattle ranches, the agriculture sector will now grapple with what a new president means and what policy changes could be in the cards.

The farming sector is Argentina’s biggest driver of exports and much-needed overseas currency, and will be key as Fernandez looks to right an economy mired in recession for much of the past year and stave off default on rising debts.

Fernandez is seen as a pragmatist and moderate but will enter the presidential palace alongside running mate Cristina Fernandez de Kirchner, the former president, who battled with the farm sector during her two-term administration from 2007 to 2015.

Fernandez has signaled he will not be as confrontational, but his policies are still unclear. As Latin America’s No. 3 economy readies for the new government to come into power in December, what are the big looming questions for farmers?

Farmers remember well the high taxes on overseas sales and export caps under Fernandez de Kirchner, who was in power before Macri moved to ease the burden on exporters.

Alberto Fernandez, who is not related to the former president, is seen as likely to hike levies too to help raise tax incomes needed to trim the country’s deficit and meet obligations under a funding agreement with the International Monetary Fund.

International shipments of soyabeans, along with oil and meal derivatives, are taxed at 18% plus 4 pesos per export dollar, which comes out to about 25%. Corn and wheat are hit at 4 pesos per export dollar, which amounts to about 7%.

Any tax increase would be paid to the government by export companies. But it would be farmers who in effect pay the tax because the companies discount export taxes from the prices they pay to growers. So higher taxes would lower local crop prices, hitting farmers’ incentives to plant and produce grains.

With currency controls currently in effect, Argentina could also adopt a twin exchange rate to ensure the farm and export sectors enjoy the competitive advantage of a weaker currency, while setting the exchange rate at a stronger level for other sectors to keep inflation in check.

Reuters