BUENOS AIRES, Jan 27 (Reuters) – Argentina’s sudden
relaxation of currency controls, long touted by the government
as essential to the country’s financial health, has left
investors wondering what’s next for Latin America’s crisis-prone
No. 3 economy.
Shopkeepers around the country hurriedly placed new price
tags over the weekend on imported items from Cuban cigars to
Asia-made televisions, reflecting a more than 20 percent drop in
the official peso rate over recent days.
BUENOS AIRES, Jan 24 (Reuters) – Argentina said on Friday it
would relax currency controls it had long defended as essential,
a policy reversal forced by high inflation and a sharp fall in
the country’s currency.
The peso currency’s official rate has fallen 20 percent
against the dollar so far this month, pressuring inflation even
higher as confidence falls in Latin America’s No. 3 economy.
The surprise policy shift was announced at the end of a week
in which central bank reserves had fallen to under $30 billion,
a level suggesting the bank’s interventions in support of the
anemic peso had become unsustainable.
A day after the peso had its hardest drop in more than 12
years, Cabinet Chief Jorge Capitanich said Argentina would
reduce the tax rate on dollar purchases to 20 percent from the
current 35 percent and allow the purchase of dollars for savings
accounts, measures that would go into effect on Monday.
He said the move “reflects the government’s belief that in
the context of a floating exchange rate, the price of the
currency, i.e. the dollar, has reached an acceptable level.”
Analysts said the government was forced to abandon one of
its signature policies due to its inflationary consequences as
consumer prices are expected to rise by 30 percent in 2014.
The currency controls had largely backfired by fueling a
scramble for dollars on the black market, which in turn
contributed to one of the highest inflation rates in the world.
The spike in inflation has revived memories of the country’s
2002 financial crisis that threw millions of middle class
Argentines into poverty.
Auto dealers have stopped selling new cars because inflation
expectations are so volatile that prices are difficult to set.
The price of household appliances shot 20 percent higher between
Thursday night and Friday morning after the peso’s Wednesday and
Stores were nonetheless full of buyers eager to lock in
prices before they rose still further.
Latin American currencies slumped Friday in part due to
worries over a looming foreign exchange crisis in Argentina.
BUENOS AIRES (Reuters) – Argentine soy farmers have lost faith in the country’s currency and are hoarding beans even as prices are expected to be weighed down over the months ahead by heavy global supply.
The country is the world’s top exporter of soymeal and soyoil as well as its third biggest soybean and corn supplier at a time of booming food demand. But, as inflation soars and confidence falls in Latin America’s No. 3 economy, a bean in the bag is better than a peso in the bank for local farmers.
BUENOS AIRES (Reuters) – A three-week drought that parched Argentina’s Pampas farm belt in December is quietly wilting this year’s corn crop estimates for the South American grains powerhouse and will likely nudge world food prices higher.
Local traders and analysts have cut their harvest estimates for this season to the 18 million to 25 million tonne range, way under the prediction offered by the farm minister just a month ago of more than 32 million tonnes.
BUENOS AIRES, Jan 9 (Reuters) – Argentina’s dry, hot
December, which caused yield damage to the country’s budding
2013/14 corn crop, has given way to a wet January and forecasts
of a wet February that should ensure a healthy soy harvest,
experts said on Thursday.
The South American grains powerhouse is the world’s No. 3
exporter of both crops, and the top supplier of soymeal animal
feed at a time of booming demand from China. Weeks of
drought-like December weather took an irreversible toll on corn,
while 2013/14 soy, which is planted later, escaped extreme
BUENOS AIRES, Jan 7 (Reuters) – Argentina’s peso slid to an
all-time low on Tuesday as supermarkets implemented food price
freezes in an agreement with the government aimed at protecting
poor families from one of the world’s highest inflation rates.
The year-long price deal on 200 on basic food products,
agreed to last week and implemented on Monday, signals a
deepening of President Cristina Fernandez’s interventionist
policies. With two years left in her second term, food prices
are being pumped higher in part by the devaluation of the peso.
BUENOS AIRES (Reuters) – Argentina ends 2013 with a heat wave that has sparked protests over electricity shortages, taking another chunk out of President Cristina Fernandez’s popularity as she faces a rocky final two years in power.
The populist leader’s steady loss of political support may force her to relax some long-held policies that have kept investors out of Latin America’s third largest economy.
BUENOS AIRES, Dec 31 (Reuters) – Argentina ends 2013 with a
heat wave that has sparked protests over electricity shortages,
taking another chunk out of President Cristina Fernandez’s
popularity as she faces a rocky final two years in power.
The populist leader’s steady loss of political support may
force her to relax some long-held policies that have kept
investors out of Latin America’s third largest economy.
BUENOS AIRES, Dec 5 (Reuters) – Argentina is not on the
verge of cutting the soybean export tax despite market rumors to
the contrary and pressure building on the government to
stimulate international sales, a well-placed source at the
agriculture ministry said on Thursday.
“As far as I know, there is nothing,” said the source, who
spoke on condition of anonymity.
BUENOS AIRES (Reuters) – Pope Francis took on the issue of high youth unemployment in his first interview aired exclusively in his home country of Argentina on Wednesday, warning that today’s “throwaway culture” had discarded a generation of young Europeans.
A day after issuing an 84-page platform for his eight-month-old papacy that blasted unfettered capitalism as “a new tyranny,” the pontiff used the interview aired on the TN TV channel to link high European unemployment to its twin problem of neglecting older people who are past their earning prime.