Argentina to tighten import controls to protect its reserves

The Argentine government will impose restrictions to discourage imports in the coming days and protect its reserves, according to people with direct knowledge of the matter.

The authority aims to avoid losing more dollars after the national statistics agency reported, on Monday, that the country’s trade deficit widened in July to US$437 million.

Private consultants estimate that the country’s so-called net reserves, its available assets minus the money it owes, fell to less than US$2 billion.

To protect its reserves, the government plans to announce three measures involving more bureaucracy or red tape for imports, especially for services.

• Requiring prior authorization for the importation of services and access to the official exchange market, evaluating the economic capacity of importers.
• The government currently requires prior authorization for goods but not services.
• The government believes there is currently an excess demand for services, which is stimulated by the high exchange rate gap.
• In addition, the government is evaluating classifying 34 imported items as “non-automatic licenses” that the Secretariat of Commerce must approve.
• This measure would affect imports that have hovered around US$1.2 billion in 2022 and represented almost 5% of total imports.
• Finally, the idea is to reduce the period in which importers must re-export a product to be exempt from import duties.
• This period would be reduced from the current 360 days to 120 days.
• It will affect imports of around US$3 billion in 2022, including soybean imports of US$1.6 billion in the same period.

With information from La Tercera