A woman walks with an Argentinian flag during a march in support of President Mauricio Macri on August 24, 2019 in Buenos Aires, Argentina.

Argentina's government has imposed currency controls in a bid to stabilize financial markets, as Latin America's third-largest economy faces a deepening economic crisis.

The temporary measures, announced on Sunday, allow the government to restrict foreign currency purchases following a sharp drop in the super-sensitive peso.

All companies must now request permission from Argentina's central bank to sell pesos and buy foreign currency to make transfers abroad.

In an official bulletin issued on Sunday, the government said currency controls were necessary "to ensure the normal functioning of the economy."

The latest move follows the surprise announcement on Wednesday that Argentina would seek to defer payments on roughly $100 billion of debt, which credit rating agency S&P classified as a default under its own criteria.

The measures — which will remain in place until the end of the year — constitute a startling turnabout for President Mauricio Macri.

Shortly after starting his term in December 2015, the embattled leader of South America's second-largest country abruptly removed strict capital controls that had been in place since 2011.

Macri's government and the central bank are trying to shore up confidence in financial markets ahead of the presidential election on October 27.