The Central Bank has tightened conditions for the purchase of foreign currency, to prevent hoarding, preserve reserves and discourage demand for US dollars.
Central Bank chief Miguel Ángel Pesce announced a host of new measures in a statement late Tuesday, including a 35 percent tax on dollar purchases by retail savers, which will apply on top of the previous 30 percent so-called 'solidarity tax.' The extra levy will also affect credit card purchases in dollars, he said.
The existing quota of US$200 per citizen per month, put in place last year by the Mauricio Macri administration, remains in place, the Central Bank said.
"The initiative intends to maintain the current monthly quota of US$200, but discourage the demand for foreign currency made by human persons for the purposes of hoarding and card expenses," the institution said in statement.
Argentine companies facing maturity of over US$1 million in dollar-denominated debt per month need to present a restructuring plan, Pesce said during a press conference in Buenos Aires. The central bank also asked the CNV, the country’s securities regulator, to raise the minimum holding period on dollar assets received from abroad to 15 working days. The holding period, known locally as “parking,” will no longer be required for sales of dollar-denominated assets that settle in local currency.
The measures by President Alberto Fernández's government seek to reduce the gap between the official exchange rate and the black market (or dólar blue), which has soared to more than 70 percent as the country’s net international reserves have dwindled to less than US$7 billion.
Argentines have been buying dollars at a record pace as the peso loses value almost every day, pushed by some anti-business government decisions, an economy in free fall due to the pandemic and lack of saving options. More than 3.9 million people, or almost 10 percent of the country’s population, purchased greenbacks in July, according to recently published Central Bank data.
“We’re seeing a strong demand for savings in dollars,” Pesce told reporters. “Tomorrow will be a day of uncertainty,” he said.
International reserves currently stand at US$42.495 billion, said the Central Bank.
Argentina hasn’t spoken to the International Monetary Fund about the new measures, the insitution said. The country is seeking to renegotiate a US$44-billion financing arrangement with the fund, and will ask to delay payments to the Fund through 2024, Economy Minister Martín Guzmán said on Sunday.
The announcement of more restrictions coincides with Fernández sending to Congress his first budget proposal, which included some rosy estimates for the crisis-prone economy.
Gross domestic product is projected to bounce back 5.5 percent in 2021 after a 12.1 percent contraction this year, the government said in its proposal, which was released a few minutes before the forex measures. Annual inflation is seen slowing to 29 percent next year, with the peso weakening to 102.4 per dollar and the country posting a 4.5 percent primary fiscal deficit, according to the plan.
While the government’s 2021 growth forecast is in line with economists’ expectations, inflation, a chronic weakness in Argentina, is forecast to be significantly higher than the official estimate, around 47 percent according to the Central Bank’s survey of economists.