Car manufacturers in Argentina are hoping that new rules authorized late yesterday to allow purchases of cars with frozen bank deposits that have been swapped into long-term bonds will spark an increase in sales, Reuters reported.
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According to Reuters, the Argentine economy ministry said it would allow such purchases for 60 days “to free up part of the reprogrammed deposits and benefit depositors.”
Four years of recession led Argentina to freeze most bank deposits in January and depositors were then allowed to swap their frozen deposits into 10-year government bonds denominated in dollars, regarded by some as a safer choice than waiting for banks to return money in devalued pesos, Reuters said.
Reuters said that, under pressure to ease public anger over the freeze and kick-start the economy, the Argentine government has on occasion, through different programmes, allowed frozen funds to be used for purchases of property, vehicles and some other durable goods.
A similar frozen deposits programme was the primary driver behind a 47.7% increase in Argentine vehicle production in April compared with March, Reuters said.
However, Reuters added, vehicle production plunged 32.1% year on year in July and half of the country’s 650 dealerships sell fewer than three new cars per month.
