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Argentina's central bank has lowered private banks' dollar reserve requirements prompted by a US$645mn deposit run in the first week of November.
In a statement, the monetary entity instructed lenders to hold just 20% of their dollar deposits at the central bank as reserves to "facilitate the ability of financial institutions to meet their client demands."
Previously, banks had to keep all dollar savings that are not loaned to finance exporters at a central bank account.
The measure comes after the government's recent moves to restrict foreign exchange purchases in an attempt to curb capital flight amid fears of a devaluation of the peso.
Since the implementation of these measures in late October, local depositors panicked as they fear their US deposits might be frozen or converted into pesos at the official exchange rate, Andrés Méndez, director at Argentine consulting company AMF-Economía, told BNamericas.
In the first week following the government's announcement, US dollar deposits among local banks fell by 4.3%, according a central bank report.
The pace of deposit withdrawals has speeded up since then, Méndez said.
To read the central bank's statement, go to this link