[captionpix imgsrc=”https://thecostaricanews.com/wp-content/uploads/2011/11/argentina.jpg” align=”left” captiontext=””]Argentina is said to have a long history of instability with regards to politics and this has been the situation since the World War II. Argentina had almost went into a coma during its economic crisis in 2001 but it was able to rebound from this situation soon enough. During the economic crisis in 2008, the economy of Argentina had again slowed bit but it has again got back the required pace. In the year 2010, the economy was seen to grow by 9.2 percent, which is supposed to be the fastest growth in Latin America. As the economy in the country recovered, so did all other aspects and thee political prospects too. This improved with the re-election of Cristina Fernández de Kirchner in October 2011, the President of Argentina. Being the second largest country in South America, here too some people do need credit help but the situation is not as worse as other parts.
Argentina and its finance
Though Argentina is in good state of financial matters, this country too isn’t immune from the on-going debt crisis that most part of the world is suffering from. So, the dollar savings are still not getting used so as to finance the exporters at central bank. The president has also asked to repatriate the export revenue. She has in addition requested the various insurance companies in the country to bring back increased investments.
Since the election in October, President Cristina Fernández de Kirchner has taken various efforts in order to slow the capital growth. This was done by tightening the policy over the foreign exchange purchases. This however has resulted in the investors to withdraw dollars from the banks. But, it has always been seen that the Argentines have viewed the dollar as one of the safe investment options.
As a result of the restrictions on the foreign exchange purchases, central bank of Argentina has cut back on their dollar reserve requirements. This also came after the deposits of the bank plunged by $645 million. In addition to this, a result of the high inflation rate throughout America, Argentina has also imposed a strict currency restriction. So, the Argentine central bank has added that it has cut its requirements for the dollar, following the decline of the USD; the dollar deposits too have plunged by 5 percent. This plunge as per the central bank of data has resulted in the dollar to reach to USD15.3 billion through 4thof November.
The central bank of Argentina will require only about 20 percent reserve from the dollar deposits of the bank. The banks were previously required to keep all of their dollar savings which were not being used so as to finance the exports at the central bank.
The recent growth in the Argentinean economy has mainly been driven as a result of the growth in the agricultural sector and also the exports of the different agricultural commodities. But this economic rebound may have to face a setback yet again because of the ongoing expansionary and regulationary fiscal and the monetary policies by the government. Still, Argentina is standing at a stable position in comparison to many other countries.
About the author:
R.Murphy is associated with the Creditmagic Community and making regular contributions as a member of the community. Not only that, he has also written articles for different financial websites.For help to build up credit visit: http://www.creditmagic.org/