The government has decided "to authorise the purchase of dollars for holding or savings," said Jorge Capitanich, President Cristina Kirchner's cabinet chief.
The restrictions had always been temporary and had served their purpose, said Capitanich, adding that the change would take effect beginning Monday.
He added that, at a rate of 8.01 pesos to the dollar, the peso "has reached a level acceptable to the objectives of economic policy convergence."
The currency's fall has been precipitous, plummeting nearly 19 per cent so far this year.
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Earlier this week, the government moved to cut back spending abroad by Argentines, to stem the drain on reserves.
The government restricted purchases from abroad made over the Internet to two a year, at a maximum value of USD 25 each, above which it would impose a 50 per cent tax.
The Central Bank of Argentina had rigidly managed the official exchange rate over the past several years.
And after spending about USD 120 million to shore up the peso on Tuesday, the bank appeared to abandon the effort to protect its stockpile of dollars.
The foundering economy has proven to be a major political liability for Kirchner, who has nearly two more years left in office.
A lawyer by training, she has faced rising criticism of her handling of the economy, including the critical shortage of hard currency.
The latest economic upheaval comes 12 years after Buenos Aires roiled finance markets by defaulting on nearly USD 100 billion in bonds, an earthquake which unleashed a tidal wave of capital flight and runaway inflation.
Kirchner has seen her approval rating slide to about 30 per cent since she was swept back into office for a second term in 2011. Her term ends in 2015.