Is this the end of the clamp on the dollar? Not entirely, but we could be heading towards it.
In a surprise announcement that not only stunned the press corps at the Casa Rosada, but also most of the entire population, Cabinet Chief Jorge Capitanich entered the press room alongside Economy Minister Axel Kicillof and announced that the National Government had decided to lift some of the restrictions on the clamp on foreign currency exchange that was put in place at the end of 2011.
He also said the income tax advance, currently at 35 percent, would be lowered to 20 percent.This also affects those making credit card purchases abroad for travel-related or online purchases.
The Cabinet Chief didn’t answer any questions and didn’t provide any details. Most journalists were trying to process what he had just said, anyway.
“We’re here to announce that we’ve decided to authorize people to purchase foreign currency according to their income. At the same time, we’ve decided to decrease the income tax advance from 35 percent to 20 percent. This decision is based on the fact that the Government considers that the dollar has reached a level of convergence that is acceptable to our economic policy goals. These changes will be enacted on Monday through the pertinent organizations.”
According to Infobae: “The ”level’ mentioned could be referencing the recent peso devaluation that took the official exchange rate close to AR$8. However, the market is not ruling out that it could continue to climb up to AR$9, and only then it would stop.”
So in theory, starting this Monday, you would be able to buy foreign currency at your local bank. But things are changing fast, as more and more information about this begins to see the light of day.
And before everyone starts celebrating, remember that restrictions will certainly apply. There is very little information and there are countless questions about this new measure. Going by Capitanich’s words, the amount of dollars that people can acquire will depend on their income,” meaning that if you earn AR$3000 a month and suddenly try to buy US$50,000 not only will you not be allowed to buy dollars, you may also end up being investigated by the AFIP because you are being naughty. Fiscally naughty. Money-laundering naughty? You get the picture.
This also means that the so-called dollar clamp is not over (and it’s not the end of an era) as the entire country thought this morning, and that really, it’s just the clamp going back to its roots. After the restrictions on dollars were implemented in late 2011, people looking to acquire foreign currency needed to be cleared to do so by the AFIP first.
So we may have to wait until next week to see what this all really means.
In the meantime, if you want to join the madness, you’re welcome to go to Twitter and try the hashtag #ChauCepo for some fun.
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