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Montevideo, September 21st 2023 - 08:55 UTC



IMF says Argentina needs to gradually lift currency exchange restrictions

Friday, September 3rd 2021 - 09:49 UTC
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The IMF said Argentina needed to eventually divert from currency controls The IMF said Argentina needed to eventually divert from currency controls

The International Monetary Fund Thursday called for a “credible and solid” plan on the part of Argentina and recommended the country gradually loosened all restrictions on foreign currency exchange.

The IMF's “External Sector Report” released Thursday requested Argentina devised a “credible and solid” macroeconomic plan and suggested that limitations on foreign currency exchange be lifted gradually.

The document, which also includes a financial analysis of current capital flows, also pointed out that such a plan needed to be “endorsed by the international community.”

The report also admitted the current cap of US $ 200 only people who meet certain requirements can get through official channels was necessary in the short run but called for its eventual suppression in a gradual manner in order to promote the arrival of foreign investment.

While this report was being drafted, Argentina's Economy Minister Martín Guzmán was renegotiating a US $ 45 billion debt with the IMF inherited from the previous administration of former President Mauricio Macri.

”We are doing well, there is no time limit (for the signing of the agreement). I am not going to sign something that harms Argentines,“ President Alberto Fernández had said last week.

”The prospects for market access in the medium term will depend on the implementation of a solid macroeconomic and structural reform plan,“ the report pointed out, adding that recovering reserves will ”pave the way for market access.”

Argentina received some US $ 4,335 million in August 2021 in special drawing rights (SDR) from the Fund made among all member countries of around US $ 650,000 million. These SDR resources have helped increase the Central Bank's reserves to face maturities until the end of the year.

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  • Chicureo

    Although I agree with the IMF’s premise that Argentina needs devised a credible and solid macroeconomic plan; and foreign currency exchange be lifted gradually — Argentines have for years have been able to outwit their system with a shadow economy.

    Until the pandemic — our family would annually vacation at the Las Leñas ski resort where it was far cheaper than skiing in my own country. The secret to the vacation deal was paying shell companies domiciled OUTSIDE Argentina for vouchers — resulting in profits and taxes to be sheltered.

    The greatest sport in Argentina is not football — but finding a way not to pay their taxes.

    Argentine exporters have finely defined their deviously brilliant business models to maximize shifting operations and profits to low-tax countries by paying minimum tax. Even Argentine executives are given an offshore credit card as a part of their employment compensation to avoid taxes.

    If Argentina was to accept a reasonable tax policy — the country would economically increase and the people would prosper.

    ¡Saludos cordiales desde Viña Del Mar!

    Sep 03rd, 2021 - 05:30 pm +1
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