Ep.19 – Reading Text – Argentina imposes currency controls to support economy

 

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Ep.19 – Reading Text – Argentina imposes currency controls to support economy

Teacher Ca: Podcast – Aprenda Inglês Online. The best way to improve your English.Teacher Ca: Hello guys. I’m Teacher Ca. Bem-vindos a mais um episódio do podcast do Cambly – a
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Vamos ouvir o professor Vernan do Cambly?

M: Let it begin.

Vernan: Argentina imposes currency controls to support the economy

Argentina has imposed currency controls in an attempt to stabilize markets as the
the country faces a deepening financial crisis.
The government will restrict foreign currency purchases following a sharp drop in the value of the
peso.
Firms will have to seek central bank permission to sell pesos to buy foreign currency and to make
transfers abroad.
Argentina is also seeking to defer debt payments to the International Monetary Fund (IMF) to deal
with the crisis.
What has the government said?
In an official bulletin issued on Sunday, the government said that it was necessary to adopt; a
series of extraordinary measures to ensure the normal functioning of the economy, to sustain the
level of activity and employment and protect the consumers.
The central bank said the measures were intended to maintain currency stability;.

It also said that while individuals can continue to buy US dollars, they will need to seek permission
to purchase more than $10,000 (£8,223.50) a month.
The measures will apply until the end of this year.

Teacher Ca: What has the government said? / O que o governo disse?
O governo disse que era necessário adotar uma série de medidas extraordinárias para garantir o
funcionamento normal da economia, sustentar o nível de atividade e emprego, e proteger os
consumidores.

Vernan: What triggered the current crisis?
Argentina has been struggling with a financial crisis, which was exacerbated by the president’s
defeat in a recent primary poll.
The peso fell to a record low last month after the vote showed that the business-friendly
government of President Mauricio Macri is likely to be ousted in elections in October.
Argentine peso você vs US dollar
You now need 60 peso to buy to 1 US dollar
Mr Macri was elected in 2015 on promises to boost Argentina’s economy with a raft of liberal
economic reforms.
But the country is in a deep recession. It has one of the world’s highest inflation rates, running at
22% during the first half of the year.
Argentina’s economy contracted by 5.8% in the first quarter of 2019, after shrinking 2.5% last year.
Three million people have fallen into poverty over the past year.

How is the move likely to be received?
Ordinary Argentines have traditionally had little faith in their own currency, preferring to convert
their spare pesos into dollars as soon as they can.

They don’t trust financial institutions much either, so they resort to what is locally known as the
colchón bank – that is, stuffing their dollars under the mattress.
Anecdotal stories abound of people keeping money buried in the garden, hidden in the walls or
even stuffed in heating systems – occasionally with disastrous consequences if there is an
unexpected cold snap.
When you consider Argentina’s history of rampant inflation and currency volatility, they arguably
have a point.
But it does mean that any restrictions on people's ability to buy dollars have an enormous
psychological impact.

Teacher Ca: How is the move likely to be received? / Como é provável que a
mudança seja recebida?

Os Argentinos, geralmente, tem pouca fé em sua própria moeda, preferindo converter seus pesos
livres em dólares o mais rápido possível. Eles também, não confiam muito nas instituições
financeiras, e recorrem a um conhecido colchón bank, ou seja, colocando seus dólares em baixo
do colchão.

Vernan: How does this compare with previous crisis measures?
The $10,000 ceiling for dollar transactions is certainly generous in comparison with past actions.
People still have bad memories of the correlation;, imposed in 2001, which stopped all withdrawals
of dollars from bank accounts for a whole year.
The only serious attempt to wean Argentines off their dollar dependency dates back to the 1990s
under President Carlos Menem, when the peso’s value was fixed by law at parity with the dollar.
But that put the financial system under severe strain, leading to the economic meltdown of 2001-
02.

Teacher Ca: How does this compare with previous crisis measures?

A única tentativa seria afastar os Argentinos de sua dependência do dólar da década de 1990.
Quando o valor do peso foi fixado por lei com paridade com o dólar. Mas isso colocou o sistema
financeiro sobre forte pressão, levando ao colapso econômico de 2001 e 2002.

Vernan: How bad can Argentina’s crisis get?
The country is struggling to stave off its fifth debt default in 30 years.
Last week, it said it would seek to restructure its debt with the IMF by extending its maturity. This
would give the country more time to pay back the money it owes to the IMF.
Rating agencies, including Standard’s and Fitch, decided that amounted to a default and
downgraded the country’s credit ratings.
Whatever happens in Argentina, the risk of financial contagion is low, say analysts.
Even in the rest of Latin America, markets are unlikely to suffer. The US-China trade war and the
slowdown in global growth are much more of a threat.

Teacher Ca: How bad can Argentina’s crisis get? / Quão ruim pode ficar a crise da
Argentina?
O país está lutando para evitar sua quinta Inadimplência em 30 anos. Na semana passada, ele
disse que procuraria reestruturar com o FMI prolongando sua maturidade. Isso daria ao país mais
tempo para desenvolver o dinheiro que deve ao FMI.

Vernan: How will this affect Argentina’s forthcoming election?
The move will probably help to slow down the depletion of Argentina’s foreign currency reserves
in the run-up to the presidential election in October.
But it is a policy reversal for Mr Macri, who lifted capital controls in December 2015.

This sets a worrying precedent, according to Edward Glossop, Latin America economist at Capital
Economics.
Left-wing candidate Alberto Fernandez, the likely victor of next month’s vote, has advisers who are
sympathetic to capital controls, he said.
Teacher Ca: How will this affect Argentina's forthcoming election? / Como isto
afetará as próximas eleições na Argentina?

A medida provavelmente ajudará a desacelerar o esgotamento das reservas em toda moeda
estrangeira da Argentina, antes das eleições presidenciais de Outubro

The fact that these have now been introduced by President Macri could make it easier for Mr
Fernandez to justify using them in the longer term; he added.

Teacher Ca: Que legal texto assim em Inglês, com nativo falando. Que oportunidade boa de podermos praticarmos o listening e o reading em um só episódio.

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