Argentina’s black market peso fell almost 8% against the dollar on Monday after a senior official flagged the return of a so-called tourism tax on spending in dollars, a move to help prop up the local peso and help fill drained state coffers. The peso was down 7.93% at 72.50 per U.S. dollar in the informal market, traders said.
The new government of Argentina agreed with national and foreign laboratories an 8% reduction in the prices of medicines until next February, in the midst of a serious economic crisis. The pharmaceutical industry estimates that the market moves in the entire productive and commercial chain about $5 billion per year and the agreement would mean resigning about $32 million per month.
President Alberto Fernández, has decreed a double redundancy compensation to workers for a period of 180 days in case of “dismissals without just cause”, as means to "stop the worsening of the labor crisis “. In the case of dismissals without just cause ”the affected workers will have the right to receive double the corresponding compensation in accordance with current legislation,“ says the decree.
The head of Cabinet, Santiago Cafiero, confirmed this Sunday that the national government will apply a 30% tax for purchases abroad and payments of services to companies located outside the country such as Netflix and Spotify.
President Alberto Fernández modified by decree this weekend the withholding scheme for agricultural exports by canceling the limit of 4 Argentine pesos per dollar that had been applied when the exchange rate was ca. ARG$ 28. The implementation of the update means an average tax increase of 5.3% with different margins on export duties for certain tariff positions.
The International Monetary Fund shares the objective of Argentina’s new government to reduce poverty and foster sustainable growth but needs details about its economic plans before discussing any restructuring of its debt, an IMF spokesman said.
Argentine inflation was 4.3% in November, taking the 12-month rate to 52.1%, as reported by the National Institute of Statistics and Census (INDEC). With this result, the price evolution rate accelerated against the 3.3% recorded in October and accumulated an evolution of 48.3% so far this year.
In his first public appearance as new Economy Minister, Martín Guzmán outlined the broad themes of the policy proposals that he hopes will take Argentina out of a "virtual default". Guzmán disclosed that there are already ongoing negotiations with the International Monetary Fund (IMF) for a new programme amid a recession. Guzmán also anticipated that "the year 2020 is not a year in which fiscal adjustment can be made" and that"a larger fiscal contraction would deepen the recession and aggravate the problem".
Two days after taking office, President Alberto Fernández will pay today ca. $ 430 million in obligations of Treasury Bills, in the so called Letes and Lecap that originally expired in September and were re-profiled. The remaining maturities in December total ca. $ 5.3 billion. It is estimated that 40% of these papers are in private hands.
A consortium led by China Huadian Corp. is close to acquiring a controlling stake in Argentine power generator Stoneway Group LP, according to people familiar with the matter. State-owned Huadian and its partners will acquire about 80% of Stoneway in a deal expected next week. The group will make the acquisition in three tranches through a unit called China Huadian Engineering.