CULIACAN, Mexico: In an attempt to thwart money-laundering by drug cartels, the Mexican government has announced strict limits on the deposit and exchange of US dollars in banks.The money helps traffickers buy military-grade weapons used to kill tens of thousands of people and recruit small armies who battle rival gangs and government forces around the country.Failure to intercept the money has long been singled out as a serious flaw in the military-led offensive against the cartels.In response, the government announced it would limit individual bank account holders to deposits of $US4000 ($4650) monthly, while others without accounts would be allowed to exchange up to $US1500.Drug traffickers have long taken advantage of lax rules and the preponderance of cash transactions in Mexico to launder multibillion-dollar annual profits in banks and currency exchange houses. It is routine to see all-cash purchases of real estate, aircraft, farms and art.The new measures were announced by the Finance Minister, Ernesto Cordero, who said they were designed to reduce laundering by ”closing the path to illicit resources” funnelled into Mexican banks. He said about $US10 billion in surplus – and probably illicit – money has been detected annually in the banking system.A recent US-Mexican government report estimated traffickers send between $US19 billion and $US29 billion a year from the US to Mexico, slightly under half via banks. The rest stays in the cash economy; about 75 per cent of all transactions in Mexico are in cash.The measures do not apply to electronic transfers and are not likely to have an effect on average Mexicans, Mr Cordero said, because the monthly limit on dollar transactions is far above the earnings of 98 per cent of Mexican households.Los Angeles Times