Argentine President Alberto Fernández (left) greets Economy Minister Martín Guzmán during the announcement of the creation of a tax on so-called "extraordinary profits" on June 6, 2022 in Buenos Aires.AGUSTIN MARCARIAN ( REUTERS)
Argentina announced on Monday measures to limit the use of dollars to pay for imports.
Cornered by the lack of foreign currency, the Government decided to allocate what little it has left to cover the purchase of gas abroad, an invoice that is paid in cash and that has doubled its amount since January, as a result of the war in Ukraine.
Companies that want to import luxury goods or non-strategic goods will no longer be able to knock on the door of the Central Bank and will have to obtain them in the commercial circuit, according to the scheme presented by the Minister of Economy, Martín Guzmán.
A little over a week ago, the vice president, Cristina Fernández de Kirchner, had criticized what she called “a festival of imports” that prevented the accumulation of international reserves.
Dollars are scarce in Argentina.
And energy imports wreak havoc on official balance sheets.
In June of last year, the bill for imported gas was 800 million dollars, against the 2,000 that the Government paid during this month that is ending.
Minister Guzmán said on Monday that if all purchases since January are added, the figure is 4.6 billion dollars, 205% more than in the same period of the previous year.
That's why he decided to turn off the tap.
"We are adapting aspects of foreign trade policy," explained Guzmán.
According to the new scheme, companies will only have foreign currency to import for the equivalent of the amount of imports in 2021 plus 5%;
the rest must be financed with 180-day credit.
“But immediate access to foreign currency is made more flexible for SMEs, companies that have imported up to one million dollars.
Before they had access to up to 105% of what they had imported last year and the rest they had to finance with credit.
Now they can access up to 115%.
Those that are not a priority, luxury goods such as airplanes or luxury cars, will not have direct access,” said Guzmán.
The Government thus responded to a demand from Cristina Kirchner, who had denounced that the dollars were used to purchase non-productive goods.
The Government of President Alberto Fernández took up the claim and took action.
The gap between the official dollar and the one that governs the black market is at the root of the problem.
While savers must pay about 230 pesos per dollar, importers buy the currency from the Central Bank at a rate of 130 pesos.
The difference is the seed of all kinds of speculative measures.
The Government then decided to force the companies to get most of those dollars in the commercial market, where the sales values are close to that of the informal market, and allocate their reserves to the purchase of energy, the account that most weighs down the fiscal accounts. .
The president of the Central Bank, Miguel Pesce, said that he hopes that the energy account will remain high at least "until October, when import needs begin to moderate" with the arrival of the summer heat.
That is why the restrictions will apply until September 30.
“We hope that this will have an impact in the order of 1,000 million dollars.
That would allow us to improve the exchange balance and increase the possibility of accumulating reserves”, said Pesce.
The market received the restrictions with a jump of six pesos in the exchange rate in the unofficial market, up to 232 pesos per dollar, 12% more than at the start of June.
The figure is the highest since the exit from the convertibility of the peso for the dollar, in January 2002. The country risk also rose to 2,434 points, 1.3% more than the day before and 43.3% more that in January.
The country risk measures the rate differential that Argentina must pay with respect to US bonds if it tries to finance itself abroad in dollars.
There was also criticism from the industry, which sees that the restrictions will affect the purchase of inputs for production at a time when the economy is taking off after the stoppage of the pandemic.
"It is not just any import, but the specific ones that make the continuity of the industrial production process," complained Daniel Funes de Rioja, president of the powerful Argentine Industrial Union (UIA).
In the afternoon, the Central Bank revealed in a statement that its president, Miguel Ángel Pesce, had met with Funes de Rioja to smooth things over.
The appointment ended with the formation of a dialogue table "to improve the regulation on the payment of imports."
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