Gov’t curbs dollar buys via stock exchange

After Wednesday’s soar, the so-called “blue” dollar yesterday dropped 30 cents to close the day at 8.45 pesos, reaching a low of 8.25 during trading.

The National Securities Commission yesterday published a new resolution aimed at limiting investors access to dollars in cash through the capital markets, in face of the increasing devaluation speculations.

According to the new measure, Cedears (Argentine Certificates of Deposit, which are shares from non-Argentine companies that are listed in the Buenos Aires StockExchange) will no longer be considered as “national assets” but instead will start to be “foreign,” in order to reduce the strong liquidity these assets can provide to common investments funds.

Investors were looking to get hold of US dollars by purchasing Cedears and, once they buy them they wire them abroad to then sell them for dollars in cash, at a rate close to 8.50 pesos.

“Things are not clear and to make matters worse those who need to wire money have an over the roof tax that can reach up to 60 percent. The market is a rock,” said a stock broker.

AFIP’s tax agency head Ricardo Echegaray yesterday avoided mentioning the difference between the official dollar rate and the “blue” dollar, stating that the agency “focuses on tax collecting policies not on currency ones.”

Regarding the impact of AFIP’s new levy increase on credit card purchase abroad from 15 percent to 20 percent Echegaray said that “the AFIP’s main concerns are the Income and Personal Assets maturities that take place in April.”

Echegaray spoke yesterday at the Economic Sciences Professional Council, in Buenos Aires City, where he said that he tax collecting entity will use “all of the technological tools available to control 100 percent of taxpayers.”

Former Economy minister Roberto Lavagna said yesterday that “the national government created” the currency exchange crisis that caused the peso to drop against the “blue” dollar. “It can’t find a solution” because “it doesn’t want to recognize neither the reality of its failure nor any other data such as inflation,” Lavagna said.

“Each additional control measure boosts the parallel dollar price, ‘blue,’ ‘black,’ whatever it’s called. They were useless,” said Lavagna, who was Economy minister during late president Néstor Kirchner’s first term in 2003.

During a radio interview, Lavagna said that “the national government faces an overhaul of its policies, but its willingness to do it seems far away. We will continue to waste time.”

“The lastest control measure, the increase from a 15 to 20 percent tax (on credit and debit card purchases abroad), and the fact that after 10:30 am there is no word from the AFIP over the possibility to buy or not to buy dollars,” are the causes of the rapid hike in the parallel dollar price, said Lavagna.

“A few months ago, not many though, we were talking about a kind of ‘Rodrigazo’ (an economic crisis that occurred in June 1975, when the then Economy minister Celestino Rodrigo announced a strong devaluation) but in phases.”

Lavagna said that “the inflation rate has sped up, all of us consumers know it. It’s a reality that’s here for good. What lies beneath this reality is the fact that the Argentine economy does not have the sufficient amount of dollars.”

The Argentine Industrial Union (UIA) vice-president and Techint director Luis Betnaza criticized the national government’s “handling” regarding the currency market and added that this methodology only generates more “speculation.”

During a radio interview, the businessman said that the measures to control foreign currency sales “are measures to cover up a currency pothole in Argentina, and any handling of the currency rate ends with these types of speculations.”

“Argentina has a longstanding experience with the dollar, it lingers in the head of many businessmen and consumers, and today it is the ‘blue’ dollar to which they have access,” said Betnaza.

“The parallel dollar market is relatively small compared to the volume of the general economy, all of these restrictions, that basically restrict the supplyof dollars, will impact, because speculation, inexorably, will lead people who don’t have the capacity to save through other assets, to purchase ‘blue’ dollars,” said Betnaza.

Betnaza added that for the time being the parallel dollar “is not affecting” imports, because the exchange rate used is the official one, but “when these types of gaps are created, prices will start taking into account different rates from the current one.”

According to reports, Trade Secretary Guillermo Moreno called yesterday for “blue” dollar exchange offices to “freeze prices” until the situation “calms down.”

Reports also said that these exchange offices yesterday shut their doors much earlier than usual.

Herald with DyN, Ámbito.com