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A reported blog on happenings around Latin America.

Capital flight doubles in Argentina

Capital flight hits its highest level in 10 years in the third quarter.
Dollars 2011 10 03Enlarge
(Bay Ismoyo/AFP/Getty Images)

Capital flight in Argentina doubled in the first nine months of the year.

A total of 8.4 billion dollars left the country between July and September, the fastest pace in at least 10 years, reports MercoPress.

That brings the total for the year to $18 billion. The Central Bank's capital reserves have shrunk to $48.6 billion, from a record high of $52.6 billion in January.

Inflation and a weakening peso have fueled fears about South America's second-biggest economy.

Private estimates put inflation at about 25 percent and the peso has fallen 7 percent against the dollar this year.

But Argentine Central Bank Governor Mercedes Marco del Pont said yesterday that the flight of dollar deposits had slowed.

The government implemented strict currency controls at the end of October, causing a surge in dollar withdrawals.

“This policy not only provides a competitive exchange rate but has also allowed us to guarantee certainty regarding the evolution of the US dollar, vanishing old (instability) phantoms of our financial and monetary history,” said Marco del Pont.

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