Tourism stocks: "We want to stop subsidizing the sale of tickets abroad", warns the Government

The decision to establish a new stocks for the sale of tourist tickets in installments was made surprisingly official on Thursday night

The government left much of the Tourism sector in shock with a surprise announcement that he did this Thursday night: prohibits banks and cards from financing trips and packages abroad in installments.

Sources of the economic team justified the measure in the need of “take care of the reserves, the dollars“and they explained that from now on”a subsidy is cut that means selling a product in dollars that is paid in fixed installments in pesos“.

The decision was made effective and official through Communication A of the Central Bank that was released this Thursday: “As of 11.26.21, financial and non-financial entities that issue credit cards should not finance purchases made with credit cards in installments. of its clients – human and legal persons – of tickets abroad and other tourist services abroad (such as accommodation, car rental, etc.), either directly with the service provider or indirectly, through travel and / or tourism agency, web platforms or other intermediaries “.

The objective of this regulation is to channel credit at no cost to domestic tourism and not to foreign tourism.. This measure seeks to take care of reserves. It is a measure that was taken with the consensus of other government agencies, “said other sources from the economic team.

Attention tourists: what does the BCRA regulations say

1. The highest monetary authority ordered the measure through Communication A 7407, which informed the entities and card issuers that from now on they cannot be financed in installments purchases made through cards, tickets to other countries and tourist services abroad.

2. The resolution prohibits the application of fees for the payment of tourist services both to stations of cards directly as through platforms travel, as established by the entity’s communication.

4. According to this measure approved on Thursday night by the entity’s board of directors, all services contracted abroad that are paid by card must be paid in a single payment or financed with the 43% rate set for him “minimum payment” of the abstracts.

5. Spokesmen for the entity clarified that banks “can give a credit to pay the ticket, personal credit type.”

Tourism stocks: the complete statement of the BCRA

The following is the full communication that the BCRA announced:

Today the interest rate for these operations is around an average of 43% annually. In the case of tickets and domestic tourism packages, they can be marketed through the Now 12 program.

Alert: BCRA reserves “are not enough”

It will no longer be possible to buy tickets and packages abroad in installments

The exchange problems are every time plus complex, something that is reflected in an increasingly strict stocks.

“The level of net international reserves is close to worrying lows. The outlook is not encouraging”, warns iProfessional Ivan Cachanosky, economist at the Fundaci√≥n Libertad y Progreso.

According to the figure reported by the BCRA itself, the monetary agency has approximately u $ s43,000 million of total reserves.

“Nevertheless, almost the 84% of that amount does not belong to the Central Bank. On the one hand, there are the private dollar deposits for an amount that is around almost US $ 12,000 million. On the other hand, there is little more than US $ 20,000 million corresponding to the swap with China, “Cachanosky warns.

In summary, according to this expert, in total the reserves are composed as follows:

-Private deposits: u $ s12,000 million.

-Swap with China: $ 20,000 million.

-Other international organizations (mainly the BIS): u $ s 3,150 million.

-Counterpart against the Treasury for around US $ 500 million.

By subtracting these items from the total reserves, the net reserves that the agency has to intervene in the market emerge.

“Thus, the Net International Reserves (NIR) are around the u $ s7,000 million, but the situation is even more worrying. It does not mean that this amount is quickly available dollars, since within this figure there are almost US $ 3.5 billion in gold and another US $ 2.8 billion in SDRs (Special Drawing Rights) “, Cachanosky explains. .

Therefore, discounting these two concepts, he argues that the Bookings liquids and fast availability are “only” u $ s800 million.

“It is more than clear that in the face of an exchange emergency, no room to maneuver with so few dollars “, warns this economist.

The Central Bank has very low net reserves, and that worries the market.

The Central Bank has very low net reserves, and that lack of dollars worries the market.

According to the opinion of Pablo Repetto, director of Gabriel Rubinstein’s GRA consulting firm, net liquid reserves (including the SDRs used for payments, but excluding gold), “at the rate that they have been falling since the beginning of September, reaches arrive with just enough a week before elections“.

Therefore, since henceforth, if the fall in net reserves continues, “it will be against gold position or against lace of deposits in dollars “, he emphasizes.

Gone is the memory that, by mid-September, net reserves had climbed to $ 10 billion. A figure that quickly disappeared because that month a debt payment installment had to be paid to the IMF, so they were reduced to the mentioned level of US $ 7,000 million.

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