(Bloomberg) -- Argentina's “strict” foreign-exchange regulations will remain in force as the government seeks to stabilize the economy, the Pagina/12 newspaper reported Saturday, citing Production Minister Matias Kulfas.
Lawmakers last month handed President Alberto Fernandez extraordinary powers to renegotiate debt terms with creditors and increase taxes, marking a victory on his first legislation since taking office last month.
“In the current context, strict exchange rate regulations are inevitable,” Kulfas, a former central bank official with unorthodox views and close ties to the president, said in an interview with the newspaper.
Ensuring the stability of the economy is “absolute priority,” Kulfas told the newspaper. While the currency policies could be reviewed as growth normalizes, “for the medium term, we will have to live with the current system,” he added.
Argentina is looking for novel ways to finance its upcoming foreign-denominated coupon payments, including recent peso-denominated bond sales. Its total debt load stands at $332 billion, including loans from the International Monetary Fund. Outstanding debt with private bondholders is about $148 billion.
The country needs a mechanism to lower the value-added tax for consumer products, targeting the poorest, Kulfas told the paper. The government will renegotiate electricity and gas rates, and ensure fuel prices are close to those of international crude.
The government will also analyze a trade deal between Mercosur, the South American trade bloc, and the European Union, and the impact on the productive sector.
To contact the reporter on this story: Oscar Medina in Bogota at omedinacruz@bloomberg.net
To contact the editors responsible for this story: Andrea Jaramillo at ajaramillo1@bloomberg.net, Linus Chua, James Ludden
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