BUENOS AIRES, Argentina - Argentines will be able to buy up to $2,000 per month if they're up to date with their tax payments, the government said on Monday during the release of the first details of its easing of currency controls.
Argentina announced on Friday it was
relaxing restrictions on the purchase of U.S. dollars. The decision was forced
by double-digit inflation and the hardest drop in the local peso's value in 12
Cabinet Chief Jorge Capitanich said on
Monday that to buy dollars, Argentines must also earn a net minimum of 7,200
pesos or about $900 per month. Capitanich said the tax rate for cash purchases
will be lowered to 20 percent from the current 35 percent. The tax rate will
not be charged if the currency remains in an account for at least 365 days.
Wage-earners will also be able to save
in dollars. But Capitanich cleared up that the Argentine tax rate on credit
card purchases made in dollars abroad will not be lowered to 20 percent from
the current 35 percent, as he had announced last week.
Argentina is suffering a shortage of
greenbacks due to one of the world's highest inflation rates, low foreign
investment and the country's inability to tap global credit markets after a
massive debt default during its 2001-2002 economic crisis.
The center-left government relies on Central Bank reserves to meet its debt payments abroad and finance infrastructure at home. But the reserves have plunged to about $29.5 billion, their lowest level in more than seven years.
The tough currency restrictions that began in 2011 have backfired by pushing many Argentines to the black market in search for dollars, and in turn, stoking inflation, which is estimated at around 30 percent.
After Friday's announcement, the black
market dollar weakened to 11.8 from 13 pesos, while the official rate held
roughly stable at an average 8 pesos to the dollar.