Argentina to tighten import controls to preserve reserves

Argentina's government will impose restrictions to discourage imports in the coming days and protect reserves, according to people with direct knowledge of the matter.

The government is seeking to avoid losing more dollars after the INDEC national statistics bureau on Monday reported that the country’s trade deficit widened in July to US$437 million. Private consultants estimate that the country’s so-called net reserves – its assets on hand, minus the money it owes – shrank to less than US$2 billion.

To protect its reserves, the government plans to announce three measures, which include more bureaucracy or paperwork for imports, especially for services.

Measures under consideration by the government:

To require prior authorisation for the services imports and access to the official exchange market, evaluating the economic capacity of importers
At present, the government requires prior authorization for goods but not for services. The government believes that there is currently an excess demand for services, stimulated by the high exchange rate gap
Also, the government is considering classifying 34 imported items as “non-automatic licences” that must be approved by the commerce secretary
This measure would affect imports that reached around US$1.2 billion in 2022 and represented almost five percent of the total imports
Finally, the idea is to reduce the period of time in which importers must re-export a product to be exempt from paying import taxes
This term would be reduced to 120 days, from the current 360 days
This will affect imports that reached around US$3 billion so far in 2022, which include soybeans imports for US$1.6 billion in the same period