BY KEN PARKS
BUENOS AIRES–Argentina’s government has increased the tax Argentines pay to travel and shop abroad to 35% as it tries to stem the slide in the country’s foreign-currency reserves.
“We believe there is a drainage of foreign currency through tourism…We have to be very careful in the management of reserves to guarantee the flow of basic, intermediary and industrial materials,” Jorge Capitanich, President Cristina Kirchner‘s cabinet chief, said Tuesday.
Mrs. Kirchner has imposed strict limits on foreign-currency transactions to keep foreigners and Argentines from pulling money out of an economy suffering from 25% inflation. Businesses that want to buy imported equipment or people planning an overseas trip have to obtain government approval to legally purchase the foreign currency they need.
Even so, the reserves that Argentina uses to pay its creditors and purchase imported goods ranging from Land Rovers to industrial machinery are under pressure from debt payments, fuel imports and capital flight. ... Read More