Argentina has temporarily cut soybean, soymeal and soyoil export taxes by 3 percentage points to 30% to help stimulate export revenue, as the country struggles with recession and dwindling foreign reserves. The tax cut will last until the end of the year before being restored to 33% in January. “We seek to strengthen the country’s international reserves,” Economy Minister Martin Guzman said in a televised address.
Argentina's Central Bank (BCRA) sold about $1.615 billion of its reserves in September to defend the country's beleaguered peso currency. This is the largest amount of reserves sold in the last 11 months since October 2019. It is estimated that between 45% and 50% of the total loss of reserves in September (some $700 to 750 million) was registered after the BCRA blocked people's access to the exchange market and cut back on the sale to many companies to pay off financial debts.
Argentina is expected to export about 870,000 tonnes of beef to China this year, matching last year's exports despite the global Covid'19 pandemic. Argentina is a major global food suppliers and China is an avid consumer of its beef. About 75% of Argentine beef exports were destined for the Chinese market last year, according to government data.
Data by the government’s official statistics agency Indec showed that the poverty rate rose to 40.9% in the first six months of 2020, a significant uptick from 35.5% in the second half of last year. The 40,9% is equivalent to some 18 million people. Argentina’s economy contracted a record 19.1% in the second quarter versus a year earlier as the Covid-19 pandemic crippled production and demand, and is on track for a 12% economic plunge in 2020, analysts say.
Argentina had a current account surplus of $2.824 billion in the second quarter versus a $252 million surplus in the first three months of the year and a $1.941 billion deficit in the second quarter of 2019, state statistics agency Indec said on Tuesday. The current account is the broadest measure of a country’s foreign transactions encompassing trade, services, and an array of financial flows, including interest payments.
A total of 504 people stopped paying taxes in Argentina due to change of tax residence. Of this number, 229 taxpayers changed their tax residence to Uruguay, including important names in the business world such as the founder of Mercado Libre, Marcos Galperin, and the president of Puente, Federico Tomasevich.
Argentine digital banking startup Uala is expanding operations to Mexico as the Covid-19 global pandemic fuels a boom in demand for cashless payment options. The announcement comes after founder Pierpaolo Barbieri said last year the company planned to double in size after millions in new investments led by Tencent Holdings and SoftBank Group Corp, the Japanese technology investment giant. Uala will offer in Mexico a Mastercard card for physical and online purchases, cash withdrawals from ATMs, and the sending and receiving of payments, the company said.
The credit rating agency Moody's raised the outlook for Argentina's debt from negative to stable in both foreign and local currency, following the closing of the securities exchange. The change in the outlook to stable from negative reflects a substantially lower risk of future losses exceeding the rating implicit in the current Ca rating, following the recent debt restructuring.
The Ministry of Economy announced it would pay close to $12 million for the maturity of interest on the PAR bonds, nominated in dollars and euros, issued in the 2010 debt swap. In these bonds, the minimum thresholds necessary to activate the Collective Action Clauses (CACs) in the last debt restructuring were not reached, which explained that the adhesion to the Argentine offer was 99% and not 100%.
The government is studying alternatives to encourage producers to market the merchandise since it estimates that they have $10.6 billion worth of soybeans and corn in their silo bags. There are 34 million tons of soybeans and corn that the farmers have in their power and that due to uncertainty and the exchange rate gap they prefer to keep.