BUENOS AIRES, Feb 9 (Reuters) - Argentina’s central bank said on Monday it would gradually increase the number of authorizations handed out to importers for dollar purchases, in an attempt to quell protests over strict currency controls critics say are choking the economy.
Due to tight currency and trade controls, Argentine businesses must apply to the central bank each time they need dollars to finance imports. For three days last week, the bank refused all requests. Without imports, many firms such as automakers that rely on foreign parts cannot operate at full steam.
“The Central Bank will slowly increase the possibility of access to the foreign currency market for importers to cancel out payment promises, while also adopting the relevant measures to avoid speculative maneuvers,” the bank said in a statement.
The statement did not specify how it would increase the possibility of access or make clear if the central bank would actually make more dollars available to importers.
Previously, Argentine authorities accused speculators of seeking to undermine the peso currency.
Late last year, Argentina’s central bank chief Alejandro Vanoli said the government would begin to normalize its currency exchange market in 2015, raising hopes among importers they might have more access to dollars.
But so far, there has been no apparent easing in restrictions. Indeed, the year began with a public outcry over a shortage of imported tampons. The government was forced to promise it would keep the supply chain filled.
The hard currency crunch stems back to Argentina’s 2002 debt default. Largely shut out of global credit markets since then, the government has over the past four years relied heavily on its foreign reserves to finance imports, pay debts and shore up the peso currency.
As reserves dwindled, the government introduced currency exchange and import restrictions to protect its stock of hard currency. In doing so, it spawned a vast currency black market.
Earlier this year, the World Trade Organization upheld its ruling against Argentina’s import restrictions and recommended Argentina fix its trade rules. (Reporting by Walter Bianchi and Sarah Marsh; Editing by Richard Lough and David Gregorio)