Argentina Backtracks on Details of Dollar Control

BUENOS AIRES, Argentina (AP) -- Argentina's economy minister is backtracking on details of the government's recent announcements over the easing of currency controls.

Argentina announced Friday it was relaxing restrictions on the purchase of dollars. The decision was forced by double-digit inflation and the sharpest slide in the local peso's value since its 2002 economic collapse, causing fears among many Argentines that it could happen again.

Economy Minister Axel Kicillof told local daily Pagina 12 in an interview published Sunday that the Argentine tax rate on credit card purchases made in dollars will not be lowered Monday from the current 35% to 20%, as he had announced.

"In the case of currency for tourism and for purchases with a credit card abroad, the 35 to 20 percent move will not be implemented this Monday," Kicillof said. There was no word of when, or if, the tax rate on credit card purchases may be eased.

The tax for credit card purchases in dollars was issued by the center-left government late last year ahead of the southern hemisphere vacation season as one of several controls aimed at slowing the flood of greenbacks out of the country.

"Internal tourism improved a lot in Argentina and those who wanted to travel were able to," Kicillof said. "People with a high purchasing power were able to spend in dollars without limits using their credit card."

The tax will still be lowered for cash purchases, however. And all the other announced measures are still to take effect Monday, most notably a provision allowing Argentines to again buy pesos for personal savings, reversing a 2012 restriction.

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