Argentine Currency Controls Have Ripple Effect
"It's not difficult; it's impossible," Gustavo Gonzalez, 49, said of his efforts to buy dollars in Argentina.
The city is a popular destination for both middle class Latin Americans and the rich and famous. Some 375,000 Argentinians visited Miami in 2011, making them the fifth largest group of international visitors. They visit the beaches, clubs and restaurants, and even "Little Buenos Aires" along a strip of Miami Beach filled with Argentinian eateries and businesses that cater to the community.
But now this world is becoming harder to reach for many Argentines.
Maria Isabel Seufferheld works at a travel agency in Mendoza, Argentina, and says she's seen more clients opting to stay within the country during their vacations. When they do travel abroad, they spend fewer days away.Seufferheld herself recently visited her son in Miami and tried to covert $800 into U.S. dollars for the trip. She was only approved for $100 for her 15-day stay. "I'm only using credit cards," she said. Under the currency controls, Argentines who are up to date on their taxes can buy no more than $100 per person for each day abroad. Two months ago, the government began cracking down on credit and debit card purchases as well, charging a 15 percent tax on all foreign purchases and a 50 percent customs duty on any goods brought back. Argentine tax chief Ricardo Echegaray has described the measures as a way to catch scofflaws and make it less attractive for Argentines to spend money abroad. They're also meant to stem capital flight, which reached $23 billion in 2011, and keep enough money in Argentina's central bank reserves to pay off the country's debt. The effect of currency controls has spilled into other areas, too. Eduardo Bleiberg, vice president of Weichert Realtors Best Beach Real Estate, said there has been a slight decline in the number of Argentinians purchasing property in the U.S.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts