Argentina’s Unofficial Exchange Rate Weakens on New Tourism Tax
Argentina’s Unofficial Exchange Rate Weakens on New Tourism Tax
(Bloomberg) -- The blue-chip swap, Argentina’s unofficial exchange rate derived from the trading of peso and dollar-denominated assets, weakened the most in two weeks after the new administration of Alberto Fernandez announced the return of a so-called “tourism tax.”
The blue-chip swap, which acts as an escape valve through which investors can move funds in and out of the country amid capital controls, fell as much as 3.1% to 76.27 pesos per dollar, the most since Dec. 4. In comparison, the official rate was little changed at 59.8 per dollar.
Cabinet chief, Santiago Cafiero told La Nacion on Dec. 14 that the government will once again tax purchases made in foreign currency including international flights, digital services like Netflix and purchases made abroad with credit cards. The tax, which may reach as high as 30%, is meant to help boost revenue and protect dwindling foreign reserves.
A similar tax was used during the administration of President Cristina Fernandez de Kirchner, which ended in 2015. She is now vice president under Alberto Fernandez.
To contact the reporter on this story: Ignacio Olivera Doll in Buenos Aires at ioliveradoll@bloomberg.net
To contact the editors responsible for this story: Carolina Millan at cmillanronch@bloomberg.net, Daniel Cancel
©2019 Bloomberg L.P.