Argentina acts to bolster bank reserves amid uncertainty

BUENOS AIRES, Argentina (AP) — Argentina's central bank has barred the country's financial institutions from paying dividends to shareholders without its authorization, seeking to bolster reserves amid investor anxieties over the apparent strength of a left-leaning presidential candidate heading to Oct. 27 national elections.

An official at the Central Bank of Argentina says the rule issued Friday is aimed at ensuring banks have enough cash on hand in case people increase withdrawals amid the "uncertainty that the country is going through."

A similar restriction was in force between 2006 and 2018, and the new rule "only applies to financial institutions," added the official, who spoke on condition of anonymity because he was not authorized to discuss the order with journalists.

The central bank's foreign currency reserves have fallen $8.8 billion as it intervened in the markets when Argentina's already weakened peso slumped 30% after the country's Aug. 11 political party primaries.

Leftist presidential candidate Alberto Fernández's vote total was far ahead of that for conservative President Mauricio Macri. That unsettled investors, who fear a Fernández victory could bring back the interventionist economic policies of Argentina's 2003-2015 governments. Fernandez's vice presidential running mate is Cristina Fernández, who was president before Macri. The Fernández are not related.