Argentina is one of the largest economies in South America but with inflation of over 50% and multiple recessions in the past decade, it is also among the most unstable economies in the world. Still, investors who want to access the global markets can do that through one of the many offshore Forex brokers available in the country.
Before looking at the brokers in Argentina, however, we should take the local restrictions on Forex trading into account. Until just a few years ago, foreign exchange trading was illegal in the country. Following multiple legislative changes, the government allowed FX trading, giving foreign traders access to the local markets and letting Argentinian investors trade on the largest exchanges in the world.
The opening of the market, however, did not occur without certain restrictions. Traders should also be aware of the current economic situation in Argentina – economic stagnation, high inflation, and a largely pessimistic outlook for the near future. In fact, since the 1950s, the country has spent a third of the time in a recession so the ongoing difficulties are not new. The Argentinian peso continues to fall – in the past 4 years, it plummeted 83.88% versus the USD.
Forex Legislation in Argentina
For many years, the foreign exchange market was practically illegal in Argentina with various restrictions placed on the inflows and outflows of foreign currency. The tight currency controls that were introduced in 2011 were lifted by the federal government that took office in 2015. In fact, this was one of the first economic policies of President Mauricio Macri – the changes his administration undertook allowed Argentines to freely buy and sell foreign currencies.
In 2016, Argentine Central Bank lifted the restrictions on the execution of cross-border derivative transactions. This opened the Forex market in the country to foreign dealers. According to the regulations introduced at that time, all individuals and companies were given the right to freely execute Forex transactions as long as they use the services of financial or foreign exchange entities authorized by the Central Bank of the Argentine Republic. In addition, there were no caps to the traded volumes.
However, in September 2019, the Argentine Executive Power established new regulations regarding some aspects of the Forex market. This was done by means of Urgency and Necessity Decree No. 609/2009 and it introduced new controls on the inflows, outflows, purchase of foreign currency and other transactions. Coming into effect on September 1, the new regulations included rules on the export proceeds (export of goods and services), purchase of foreign currency, foreign currency debts, etc.
According to the changes in the legislative frame, individuals who reside in Argentina need prior authorization by the BCRA (Central Bank of the Argentine Republic or Banco Central de la República Argentina) to access the foreign exchange market. This includes various actions on the Forex market such as creating external assets or granting any kind of guarantees concerning derivatives transactions. This restriction applies to all transactions that exceed US$10,000 a month.
There are no restrictions for Argentina-based individuals to transfer foreign currency from their local foreign-currency-denominated accounts to their own accounts abroad. There is, however, a monthly cap of US$1,000 for non-resident individuals who want to purchase foreign currency. When it comes to legal entities, firms, trusts, mutual funds, etc., prior approval from the BCRA is always required to access the foreign exchange market. BCRA’s authorization is also required in all cases when individuals or legal entities want to purchase foreign currency and pay profits and dividends abroad.
Argentina’s Financial Regulators
There are several authorities that are responsible for the regulation and supervision of the financial sector and the foreign exchange market, in particular. These include Argentina’s Central Bank or BCRA, as well as the Ministry of Economy and Finance. The authority, which regulates Forex, is the National Securities Commission (Comision Nacional de Valores or CNV).
The CNV is the national agency, responsible for the supervision and control of the equity markets in the country. It was created in 1968 and is currently an independent entity under the Ministry of Economy and Finance. The CNV regulates all security transactions and is the main body that issues the rules and regulations regarding equity markets and the Forex.
Forex Payment Methods in Argentina
Until recently, the currency controls that were in place in Argentina meant that many of the popular payment methods used by traders around the world were not available in the country. This included credit cards, online banking, and even digital wallets. However, after many of the restrictions were lifted, traders now have access to a wide variety of banking methods.
This includes internationally accepted credit and debit cards by Visa and Mastercard, as well as locally available prepaid cards and vouchers. Still, regulations regarding Forex and the financial sector as a whole are introduced often by the local regulators in an attempt to address the unstable economy of Argentina. For instance, authorities set a limit for the maximum deposit from bank cards to $50 and as a result, traders could not fund their trading balances using digital wallets such as Neteller, Skrill, or PayPal.
Argentinian investors who want to access the foreign exchange market should also be aware that cards issued by local payment networks cannot be used on the websites of international brokers. For instance, Naranja, which is part of Grupo Financiero Galicia and is among the biggest credit card issuers in Argentina, supports only domestic payments. Many traders use alternative payment methods to top up their online trading accounts and one of these is Mercado Pago. This is an online platform that allows you to make payments and receive money by using emails.
Popular Trading Software in Argentina
Traders in Argentina have access to many of the major Forex brokers from all over the world but the most preferred trading platforms are those available in Spanish. In fact, for most investors, the choice of a broker is much more important than the choice of a platform – after all, the vast majority of online FX brokers offer MetaTrader 4, the most popular trading software in the world.
Argentina is no exception and traders here are familiar with MetaTrader 4. It was introduced nearly 15 years ago but it still is the most widely used trading platform. It is available for free and features a simple design and an exceptionally user-friendly interface suitable even for beginners. MetaTrader 4 or MT4, as it is usually referred to, is a great option for those who want to trade Forex along with other financial instruments, including CFDs, indices, commodities, futures, and cryptocurrencies.
The platform is great for less-experienced traders since it is easy to use and has great functionalities such as copy trading and Expert Advisors. It provides a lot of statistical data, news, and analysis from professionals. In addition, traders gain access to tons of tutorials and educational resources. Advanced traders, on the other hand, can take advantage of MT4’s excellent charting capabilities, its built-in indicators (30 built-in technical indicators and 24 graphic objects), in-depth technical analysis, and the option for automated trading.
Argentinian investors who are interested in trading other markets besides Forex – commodities, stocks, etc., also find MetaTrader 5 a useful alternative. Although the two platforms were created by the same company and are visually similar, they are actually targeting different types of traders. Unlike MT4, MT5 was designed to plug into centralized trading exchanges where stocks and commodities are usually traded.
Mobile Trading in Argentina
Trading today differs significantly from two or three decades ago. Online brokers made Forex, as well as other financial instruments, extremely popular among retail traders. In the past, the global markets could be accessed only by financial institutions, large brokerages, pension funds, and investment banks. Now, everyone can invest in gold, company stocks or foreign currencies as long as they have enough capital and access to the Internet.
The rise of mobile technologies, however, is making FX trading even more accessible. As mobile technologies improve, more investors prefer trading from their mobile phones and tablets. Argentina is, of course, no exception to the rule – Argentinian traders can download and install the mobile apps offered by their preferred brokers. As we have mentioned above, most brokers offer access to the MT4 platform, which is available for iOS and Android devices. The vast majority of trading platforms are also mobile-friendly. However, for fast execution and seamless performance, traders should connect through stable Wi-Fi or 4G.