from The Wall Street Journal..
May 30, 2013, By TAOS TURNER
BUENOS AIRES—Argentina’s Congress 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 YPF +0.26% SA.
The law aims to bring much-needed U.S. dollars into the economy at a time when demand for the currency—and strict government limits on selling dollars—is causing problems for the country’s foreign-exchange rate and its housing industry.
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, where transactions are traditionally done in dollars. 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.
Argentina is bucking a broader trend in Latin America, where many countries are seeing their foreign reserves grow amid low inflation and sustained economic growth.
A lack of confidence in Argentina’s currency and in government policies has led investors to withdraw their dollars from banks. It has also led people and companies to buy dollars in a vibrant black market because of fear that the peso will do nothing but lose value in the months and years ahead.
Link to the entire article: http://online.wsj.com/article/SB10001424127887324682204578515292705781504.html?KEYWORDS=Argentina