Central bank of Argentina on Wednesday imposed a new rule limiting the import of foreign luxury goods as part of its effort to stanch the leakage of its own international currency reserves. Luxury goods like high-end sports cars and private planes will be subject to the new rule saying that importers will have to get their financing from overseas or wait a year to pay their overseas supplier, all in an effort to slow outflow of central bank dollar reserves. Importers of luxury goods and a specific set of final goods must obtain financing before entering the official market to cancel payments.
Most recent central bank data says international reserves were at US$ 39.5 billion. At the end of December 2019, the bank had US$ 44.8 billion in reserves. Importers buy dollars at the official exchange rate in order to pay their overseas suppliers. Those dollar purchases have helped strain the bank’s reserves. Argentina is trying to bolster its international reserves as it contends with a recession that has been worsened by the COVID-19 pandemic, while the peso weakens amid high inflation.