Central Bank relaxes foreign exchange restrictions

As reported by Bloomberg, Carolina Millan: Argentina’s central bank moved one step closer to allowing the free flow of foreign currency when it removed a limit on how much of their savings individuals and companies can convert into dollars.

Policy makers, in a statement Monday August 8, also said they will cut the amount of paperwork companies must submit to justify dollar purchases and reduce the categories of foreign exchange transactions that must be reported to the government to 70 from 315. The central bank previously limited conversions to dollars to $5 million per month, so no more limits. There are no limits on dollars bought to pay for imports. Since taking office in December, President Mauricio Macri has lifted a currency peg and let the peso float as he seeks to unwind restrictions put in place by his predecessors.

"The central bank is driving these changes with the certainty that cutting bureaucracy in the foreign-exchange market will help the development of the finance sector and benefit all production activities connected in any way to international markets," the central bank statement said.

At SCA we see this as a big step forward, as the paperwork bureaucracy for foreign investment has been a big hurdle for most investors, and often it has been the factor that has deterred investment. SCA is familiar with all the new changes and ready to assist foreign investors through this much easier and achievable process.

And in further good news from an economic and conservation standpoint.......Argentina is promoting GREEN INVESTMENT by using the Decree of Necessity and Emergency number 882 of the Ministry of Mining and Energy, which puts into law exceptional measures to ensure foreign investment in renewable energy.This year the government has authorized the entry of up to US$1.7 billion for the execution of works that fall within the framework of energy production from renewable sources.

President Macri and his team see this move as something that goes beyond politics and should be supported by all political parties and affiliations. In general, Decree 882 provides significant guarantees to foreign capital arriving in the country under this legislation, including the ability for investors to obtain insurance with the World Bank to guarantee their investment.

SCA sees this move toward protecting the environment and encouraging Green Investment as another positive step forward for the Macri administration in rejoining the world community, and an important step in recognizing the future energy needs of Argentina.