Argentina's government lifted import restrictions on Tuesday and its central bank prepared to issue dollar bonds to repay overseas commercial debt, further advancing President Javier Milley's free trade agenda. The tax authority on Tuesday replaced its import management system with a more data-based one. The original system required companies to manually approve each batch of goods when importing, a cumbersome process.
"Starting today we will normalize import procedures, which have been obstructive in the past, created greater inflationary pressures and created supply shortages," Economy Minister Luis Caputo wrote on social media. "Government bureaucracies will no longer have the power to decide who can import goods."
Lacking dollars, Argentina's previous government curbed imports in an attempt to maintain exchange controls that led to an overvalued peso. Milley's government announced a more than 50% devaluation of the peso in his first full week in office, and the central bank has begun rebuilding depleted foreign exchange reserves, a key step toward normalizing trade.
Import shortages have hurt the real economy in recent months, with some hospitals reporting being unable to bring in necessary equipment made abroad. Even major international companies have been affected. General Motors' factory temporarily suspended production in October due to a shortage of auto parts.
The central bank is taking further steps to help businesses resume trade as the government develops new systems for importers. The monetary authority plans to tender three-year dollar bonds on Wednesday for importers who owe a total of about $30 billion to overseas suppliers due to capital constraints. The bonds, which carry an annual interest rate of 5% and can be purchased with pesos, are intended to help the central bank absorb some of the pesos to ease inflationary pressures.