Argentina to tighten import controls to protect dollar

Argentina will more strictly regulate import permits in an effort to prevent fraud and protect US dollar reserves, Economy Ministry sources said on Saturday.

The sources said the new system will include verifying that the size of the importer's request is consistent with its financial resources; requiring importers to designate only one bank account for foreign trade; and a more precise timing for importers' purchases of foreign currency from the central bank. The government will issue a detailed decision in the coming days, which will take effect on October 17. "This is to bring order to the system and prevent irregularities," said a source familiar with the plan. With the central bank's US dollar reserves limited, the government wants to make sure the foreign currency is used for approved imports that will boost domestic production. Reserves stand at $36.55 billion, the central bank reported Thursday. In Argentina, the dollar is worth 88% more in Argentine pesos on alternative financial markets than the official rate used to pay for imports. This has led some importers to overcharge or request duplicate permits, one of the sources said. "Given the difference, it is very tempting to access dollars on the official market, so there are plans to accumulate unnecessary inventory," the official said, requesting anonymity. "Some importers are trying to obtain as many goods as possible using the official dollar inappropriately." The new system will also allow small and medium-sized companies to reduce the time required for import payments from 180 to 60 days. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!