🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

Argentina to tighten import controls to preserve dollars

Published 10/08/2022, 05:28 PM
Updated 10/08/2022, 05:30 PM
© Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration February 7, 2011. REUTERS/Lee Jae-Won/File Photo

By Eliana Raszewski

BUENOS AIRES (Reuters) - Argentina will regulate import authorizations more closely in an effort to prevent fraud and preserve reserves of U.S. dollars, Economy Ministry sources said on Saturday.

The new system will include verification that the size of an importer's request is consistent with its financial resources; requiring importers to designate only one bank account for foreign trade and more precise timing for importers' purchases of hard currency from the central bank, the sources said.

The government will publish a detailed resolution in the coming days and it will take effect on Oct. 17.

"This is to bring order to the system and avoid irregularities," said one of the sources familiar with the plan.

Given limited central bank reserves of U.S. dollars, the government wants to make sure that hard currency is used for approved imports that increase domestic output.

The reserves stand at $36.55 billion, the central bank reported Thursday.

In Argentina, the dollar is worth 88% more in Argentine pesos in alternative financial markets than under the official rate, which is used to pay for imports. This entices some importers to overcharge or duplicate authorization requests, said one of the sources.

© Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration February 7, 2011. REUTERS/Lee Jae-Won/File Photo

"Given the gap, it is very tempting to access the dollar in the official market, which is why there are schemes to accumulate unnecessary inventory," explained the official, who asked not to be identified. "Some importers improperly try to obtain as many goods as possible using the official dollar."

The new system will also allow small and medium-sized companies to reduce the timeframe for import payments from 180 days to 60 days.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.