BUENOS AIRES: Argentina's peso opened weaker on Wednesday as markets reacted to new foreign exchange controls implemented by the central bank as the South American country's currency fell against the greenback.

The peso opened 0.08% weaker at 75.25 per US dollar, traders said. Country risk rose 38 basis points to 1,157. Eyes will be on Argentina's black market peso, opening later, to see if the gap widens with the official rate as a measure of the lack of confidence in the local currency.

In a bid to protect its dollar reserves, the central bank on Tuesday tightened controls on buying dollars in the foreign exchange market, transactions involving dollar-denominated bonds and credit card purchases made in foreign currency.

Argentina's economy is in recession for the third year in a row, with a central bank poll predicting a 12% contraction in 2020. The country remains in the grip of the coronavirus, which has hit Latin America particularly hard.

The new central bank restrictions are an extension of some controls that have been in place since last year to prop up the battered peso.

The bank said in a statement that it kept the individual dollar purchase limit for savings at $200 per month, while increasing the taxes that people pay on those purchases.

Access to dollars for the purpose of paying off foreign credit card debt and for purpose of saving in a stable currency will be taxed at 35%, and restricted to the $200 limit, the statement said.