Florencia Barragan 
The government is betting that the import taxes and preferential exchange rate brought in on Monday will have a low impact on inflation. This is partly because they see them as preferable to a generalized devaluation — but also because they say companies have increased prices well above inflation and the crawling peg over the past year. This was reflected in the wholesale prices of imported goods, which rose by 55 points above the official exchange rate over the past year.
Sources from several business chambers confirmed that the official dollar rate is losing its status as a point of reference for transactions and restocking merchandise. They asked to remain anonymous because the matter is a subject of dispute with the Economy Ministry.
“What type of dollar do you use for your commercial transactions?”, 530 companies were asked in the survey of economic expectations carried out by the Association of Entrepreneurs for the Argentine Development (ENAC). Only half (52%) answered that they use the official exchange rate, while almost one in three revealed that they use a different rate: 17% the blue dollar, 8% “an intermediate dollar according to my own criteria” and 3% use the MEP or the CCL dollars.
But what was surprising about the response was the number of “don’t know, don’t answer”, which was 20%. On this point, ENAC president Leo Bilanski said: “20% of businesspeople prefer not to reveal how their costs are composed. In a way, it is clear that there is still a minority sector, but that could speculate importing at the official dollar, and reselling at the illegal dollar, something unacceptable in view of the foreign exchange situation we are going through”.
When asked about the exchange rate at which companies calculate the replacement cost of imported goods, an important chamber of commerce in the metals sector answered: “It is very heterogeneous with respect to the possibility of importing directly or buying from third parties, but in general it would be a sort of mix between the official and the blue dollar.”
A source at a textile union that preferred not to be identified said: “It is true that we all import at the official dollar, but to this we must add the cost of financing at 180 days when you don’t know how much the dollar will cost, it is what some call the light blue dollar.”
Julián Moreno, President of the Assembly of Small and Medium Entrepreneurs (Apyme), said: “In almost all cases it is at the parallel rate, except for inputs of regulated national production, but unfortunately there are fewer and fewer things left. For small imports, there is still the possibility of importing at the official rate for an amount lower than US$50,000 per year, which for some small importers may be useful. The availability of yuan has freed many imports, but it’s hard. The measures are short-term and in view of the low certainty that this generates, companies cover themselves just in case. It is not always speculation, it is not easy to survive in this context.”
Moreno went on: “We know this situation is a consequence of the drought, the Central Bank that could not limit the drain of reserves, the agonizing negotiations the IMF is putting us through, and the irresponsible messages of some political leaders that generate uncertainty and therefore, more gaps, feeding back into this process”.
The government knows this and questions it in meetings with business leaders. Senior sources from the economic team stated that they expect the tax on imports of goods will not be passed on to prices. “Businesspeople have already been increasing prices above the devaluation process, with widening margins,” said one such source. They cited the imported wholesale price index, which in the last year rose 158%, against a 103% increase in the official exchange rate — a difference of 55 points.
However, companies already expect the “PAIS” tax on imports (of 7.5% for goods and 25% for services) to hit prices. “Today, lists with 7.5% increases have already arrived,” said Marcelo Fernández, head of the Argentine Business Confederation (Cgera). The confederation is asking what the list of those exempted from the tax will look like. “Will the ink used for food packaging be included or not?” asked Fernández. They are considering asking the Economy Ministry to exempt industrial inputs that are not produced in the country.
