Argentina Deputy Economy minister Axel Kicillof pledged “to look into” the growing parallel market for the US dollar because it is harming many innocent people who have nothing to do with speculation and claimed that ‘certain economists’ and media are encouraging speculation with the greenback.
“We are certainly going to look into the ‘blue’ market. But it is clear that the problem is political because there are those generating expectations that everything is wrong with the economy and are encouraging the blue dollar market, such is the case with orthodox economists and the media”, claimed Kicillof.
Most economists agree that it was precisely the government of President Cristina Fernandez decision to restrict access to foreign currency or save in dollars that created and promoted the ‘blue’ dollar or parallel market.
Kicillof pledged to look into the ‘blue’ market when during a radio interview one of the listeners asked how he could get hold of dollars to pay his mortgage without having to go the ‘blue’ market where the price of the dollar on Wednesday was double the official rate.
“We know these kinds of things generate much abuse and harm innocent people that have nothing to do with speculation. It is a secondary market and we still don’t clearly know its dynamics, but yes, we are going to look into it”, said the Argentine government official.
He went on to blame the orthodox economists that question government economic policies and the media which is confronted with President Cristina Fernandez administration.
“There are some campaigning, agitating that everything (with the economy) is going to hell”, complained Kicillof.
He also admitted that the real sector is facing ‘problems’ and again insisted that the government will continue to take “heterodox and creative” measures to revert them.
Traditionally in Argentina real estate transactions have been done in hard currency, preferably the US dollar, but since the restrictions the market has plummeted.
Kicillof said that the latest measures (tax amnesty) are designed to bring Argentine savers dollars and assets back home, because “the country needs them” and is facing a “too troubled international context”.
“Those helping Argentina will be granted with a Real Estate Deposit Certification, CEDIN, in dollars that holders can use either to purchase a property or invest in a real estate development”, said Kicillof.
Another bond, BADE or the Argentine Bond for Economic Development, is a public debt share issued in dollars paying a 4% bi-annual interest rate that “those supporting the government’s heterodox call will be able to use for stock market purchase (through a stock broker) and also in retail banks”.
He highlighted that the bonds are “safer and more convenient” than the US currency: in case of theft or loss, people can get them back as they are endorsed and banks have access to the Properties Register office”.
Finally he complained that “they accuse us of being desperate for dollars and of whitewashing friends but these are all absurd and fruitless allegations,” the official told reporters at a local radio station.