BUENOS AIRES--A host of strict capital controls stemmed capital flight during the first quarter, with Argentina posting a small net capital inflow compared to a steep outflow a year earlier.
The economy swung to a capital inflow of $110 million during the first quarter of the year, from a capital outflow of $1.61 billion in the first quarter of 2012, the central bank reported Friday.
The government has virtually banned dollar-buying by citizens, blocked international companies from repatriating dividends and thrown up a host of barriers to imports to stem the heavy outflow of dollars seen in recent years.
While controversial, the measures have been successful in stemming the outflow of dollars. According to the central bank, $3.40 billion were moved out of the country last year, down sharply from $21.50 billion in 2011.
President Cristina Kirchner introduced increasingly strict capital controls shortly after winning re-election in October 2011.
Now only small amounts of dollars are made available for those traveling overseas, while importers and companies seeking to pay for overseas services face daunting bureaucratic hurdles. The controls have also crippled the traditionally U.S. dollar-denominated real-estate market and rattled investor confidence.
Home sales crashed 41% in Buenos Aires in the first quarter of 2013 from a year earlier as confusion over the value of the peso wreaked havoc on the housing market.
The construction industry, which accounts for near 5% of overall economic output, has also suffered, and tens of thousands of workers have been laid off recently.
As a result of the capital controls, a black market has sprung up, where residents pay a steep premium--currently about 60%--to buy dollars.
Hoping to attract dollars back into the economy, the government last month passed controversial legislation that pardons tax evaders if they invest their hidden cash in construction projects, or use it to buy bonds to help finance state-run oil company YPF SA.
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The economy swung to a capital inflow of $110 million during the first quarter of the year, from a capital outflow of $1.61 billion in the first quarter of 2012, the central bank reported Friday.
The government has virtually banned dollar-buying by citizens, blocked international companies from repatriating dividends and thrown up a host of barriers to imports to stem the heavy outflow of dollars seen in recent years.
While controversial, the measures have been successful in stemming the outflow of dollars. According to the central bank, $3.40 billion were moved out of the country last year, down sharply from $21.50 billion in 2011.
President Cristina Kirchner introduced increasingly strict capital controls shortly after winning re-election in October 2011.
Now only small amounts of dollars are made available for those traveling overseas, while importers and companies seeking to pay for overseas services face daunting bureaucratic hurdles. The controls have also crippled the traditionally U.S. dollar-denominated real-estate market and rattled investor confidence.
Home sales crashed 41% in Buenos Aires in the first quarter of 2013 from a year earlier as confusion over the value of the peso wreaked havoc on the housing market.
The construction industry, which accounts for near 5% of overall economic output, has also suffered, and tens of thousands of workers have been laid off recently.
As a result of the capital controls, a black market has sprung up, where residents pay a steep premium--currently about 60%--to buy dollars.
Hoping to attract dollars back into the economy, the government last month passed controversial legislation that pardons tax evaders if they invest their hidden cash in construction projects, or use it to buy bonds to help finance state-run oil company YPF SA.
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