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Argentina imposes foreign-exchange controls to contain the run for dollars

Monday, September 2nd 2019 - 09:56 UTC
Full article 5 comments

Argentina on Sunday imposed foreign-exchange controls on exporters as it closed out a week of financial uncertainty that saw a sharp drop in the peso. Exporters were ordered to seek permission from the Central Bank of Argentina before purchasing foreign currency, according to a decree published in the Official Bulletin. Read full article

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  • Enrique Massot

    Live and learn, Mauricio Macri dixit.

    Who would have guessed that unpopular president Macri would implement measures he previously decried as worth only of a populist government?

    Perhaps Tarquin Fin was right when he posted that he sees Macri as “pretty populist” and that the president finally showed his true leanings?

    Difficult to know. In any event, a certainty is gradually emerging: The Macri administration will leave a country devastated, with an unmanageable foreign debt and no a dollar in reserves (these are evaporating with each passing day).

    And for those who parrot the old cliche that CFK left Argentina in a dire situation at the end of 2015, let's remember that the situation could not have been that bad when the subsequent administration was able to borrow profusely from the private sector--at least until April 2018, when the government turned to the IMF to borrow still some more.

    Sep 02nd, 2019 - 07:17 am - Link - Report abuse -2
  • Tarquin Fin

    Enrique,

    Did you mean a “petty populist”? Then of course he is.

    Anyway, I really hope you understand the dire situation Argentina gets itself into from time to time.

    In 2015 the only thing you could do to avoid a default was borrowing. The agricultural surplus has already been captured with retenciones.

    How was the “petty populist” supposed to cover for all the unpaid bills? He thought at the time that by using his pro-market charm, investments would flood the country. That never happened and the already ruined country from 2015 started to slowly sink in mid 2018.

    Tough times ahead for Alberto.

    Sep 02nd, 2019 - 10:34 pm - Link - Report abuse +2
  • Enrique Massot

    TF

    I agree with the last line of your comment. A steady hand will be required to pull Argentina from the deep bottom it is now.

    That's about it.

    Next, you express your hopes that I “understand the dire situation Argentina gets itself into from time to time.”

    Are you kidding? I have been expressing in this forum just so, since December 2015.

    Then, you make a misleading statement regarding the elimination of retenciones to agro-exports: “the agricultural surplus had already been captured.” No such thing.

    The elimination of retenciones was one of the gifts Macri made to large landowners and agro-exporters (and mining corporations too), depriving the state of a significant revenue source.

    Next, you blatantly contradict yourself: “the already ruined country from 2015 started to slowly sink in mid 2018.” Very clever. CFK ruined the country and Macri just “slowly sank it.”

    Not such thing. If the country was ruined in 2015, how come Macri was able to borrow like there was no tomorrow for two years? Not only that -- after private speculators shut the spigot down in April 2018, Macri joyfully continued to borrow -- this time from the IMF. No sir. The country Macri got in December 2015 was pretty much in shape, especially when compared to the state it is today.

    Yes, there are tough times ahead for Alberto Fernandez.

    But it's even tougher to do as badly as Mauricio Macri.

    Sep 03rd, 2019 - 02:50 am - Link - Report abuse -2
  • :o))

    @Tarquin Fin / @Enrique Massot

    REF: “A steady hand will be required to pull Argentina from the deep bottom it is now”:

    They + Brazil should be feeling comfortable at the bottom of the Black Economic Hole. After all, they had been yearning for years to be [or to remain] there! So why rock the boat?

    Sep 03rd, 2019 - 01:53 pm - Link - Report abuse 0
  • Tarquin Fin

    Enrique, No contradiction my friend. The country was almost broke in 2015. Macri played his political cards. Eliminate retenciones (get support from the agro business), eliminating exchange and capital controls and start servicing the debt (nominally getting out of default, which enabled borrowing) hoping that investments would follow and so repay the debt.

    When the supposed investments didn't show up (except for the carry traders) he had to undo #1 and now #2. So yes, retenciones are capturing again the surplus from the agro sector (AF could increase them but not so much).

    Looks like :o)) is right. Taking into account the disastrous management from CFK and Macri combined, yes indeed we've been yearning to hit rock bottom.

    Sep 03rd, 2019 - 02:47 pm - Link - Report abuse +2

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