Argentine foreign currency crunch delays import payments

GMT 21:40 2014 Tuesday ,21 October

Arab Today, arab today Argentine foreign currency crunch delays import payments

Buenos Aires
Buenos Aires - AFP

Argentina's foreign currency shortage on Tuesday hit the country's import sector, which asked the government for $5.5 billion for the purchase of industrial supplies.
Miguel Ponce, who heads the Argentine Chamber of Importers, said about half the supplies were needed for the automotive industry. The electronics industry was also affected.
"Complications around imports have gotten more acute since July," Ponce told AFP.
The lack of dollars has led to uncertainty in Argentina, and there is a wide discrepancy between how much a peso is worth on the official exchange rate and how much it costs to buy one on the black market.
The Argentine Central Bank has reserves of about $27.3 billion, less than half what it had in 2011. Part of the drain is for payment of public debts.
President Cristina Kirchner has tried to convince Argentines to stop hoarding greenbacks and spend their pesos instead, but her appeals have largely fallen on deaf ears.
Ponce said the situation has led to Argentine consumers having less choice. For instance, of the 100 or so cellphone models supposed to be on sale in the country, only about 60 are actually available, he said.
"It's the same with laptops. We can only find 16 of the 25 models available," he said.
The situation is having a direct impact on the labor market, he said. For instance, in the southern Tierra del Fuego region, a lack of parts is impacting factory assembly lines.
In August, imports dropped 20 percent compared to a year earlier and exports fell 12 percent in the same period. The country's trade surplus rose to $899 million.


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