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Argentina money laws impact on market

New restrictions on foreign exchange purchases in Argentina are making it harder for education agents in the country to pay fees abroad, and forcing students to use the country’s black market in currency exchange.

“The only thing this law will achieve is to strengthen the force of the black market”

The laws, which were introduced last month to reduce capital flight and tax evasion, require those wanting to exchange Argentine pesos for US dollars to explain where they got the money, and show they have paid their taxes. While the ruling concerns dollars, sources say transactions to all currencies are being affected.

For agents sending large groups of students abroad to destinations such as the UK, US and Australia, this means considerable uncertainty. One agent from Mendoza, who did not want to be named, said at least half of a group of 18 students due to start three-week English language courses in Oxford, England, in January could have trouble paying their fees. Many have already paid for flights.

“We need to have all their fees paid by December 10th, but it is so difficult at the moment, because they want to transfer the money from their own account to the UK and they are being denied,” she said.

“It’s the same going to Australia or South Africa. As for my group going next July, I don’t know what will happen.”

The manager of one of the English schools involved said: “The government makes it difficult to ship large sums of money out of the country. When it’s an agent with a group of 30 students, each of which is paying £3,000, that’s a lot of money.”

Other agents who talked to The PIE said that Argentinians are used to finding ways to work around such restrictions. Bigger agencies keep foreign exchange accounts overseas, while students pay fees individually to avoid an agent having to account for large sum payments. If all else fails students can use the black market – an expensive and risky solution.

For Carole Wober from CW International Education, Buenos Aires, the rules will not stop students studying abroad but will make things “harder for everybody” – both smaller agents and poorer students who are unlikely to have foreign exchange accounts.

Bigger agencies keep foreign exchange accounts overseas

“Those who really make an effort to send their kids abroad to high school or English language colleges and save every single penny will be affected,” she said. “They wouldn’t just be able to turn their money into foreign currency.

“The only thing this law will achieve is to strengthen the force of the black market,” she said.

Defending the government’s actions last month, Economy Minister Amado Boudou said that the measures will create a fairer system and rein in inflation, estimated to be a whopping 9.9% annually.

Others expect the government to adapt the rules in time. “The rules are very recent. The system is not prepared for it, but the government should make adjustments,” said Cecilia Nunico, an Education Counsellor at ANZ in Buenos Aires.

Until then agents will have to be patient, hoping that they find a way to circumnavigate the issue. Said Wober, “Being Argentinean you are used to these changes. We have been through all these different crises [and] you tend to accept these things.”

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