South America, which has been relatively peaceful in recent years, has experienced major social problems in many countries in just a few months this year, such as Chile entering a state of emergency. , unrest in Ecuador, nationwide unrest in Bolivia and the resignation of President Morales, general strikes in Colombia, etc.
Textile foreign trade export companies must pay attention to the market and foreign exchange collection risks!
Argentina – “difficult situation” under foreign exchange controls
On August 12, due to Macri’s unexpected defeat in the preliminary election of the presidential election, Argentina staged a “three kills” of stocks and bonds. The Argentine peso once fell by about 36% against the U.S. dollar, reaching 61.99 pesos, setting a new intraday record low. The RMB exchange rate against the Argentine peso rose to 7.3885 pesos, appreciating 35% during the year.
Markets are worried that if Fernandez is elected, the Argentine government’s budget may balloon again, jeopardizing the International Monetary Fund’s (IMF) economic aid to Argentina. Traders are worried that this The election is a signal that the country may consider returning to policies such as currency and capital controls.
At present, Argentina’s domestic economic and financial situation is still in a state of crisis, and the situation of high unemployment, high inflation and high foreign debt has not significantly improved. Data show that as of the first quarter of this year, Argentina’s domestic unemployment rate exceeded 10%; in July this year, Argentina’s domestic CPI increased by as high as 55.8% year-on-year.
On October 27, opposition candidate Fernandez won the presidential election.
On October 28, the Central Bank of Argentina announced that it would significantly adjust the limit for individuals to purchase US dollars, adjusting the US dollar purchase limit to US$200 per month until December.
In order to prevent the peso exchange rate from falling, the bank announced in early September that the dollar purchase limit would be US$10,000, and also introduced other exchange rate control policies.
Argentina must repay US$5 billion before the end of 2019, but its resources on hand are very limited.
Although the country’s total foreign exchange reserves still look sizable, totaling $43 billion, once you discount some untouchable assets, such as Argentines’ daily dollar deposits and the Chinese-granted line of credit, this number will be significantly reduced. Analysts polled by Bloomberg News estimate that policymakers actually have no more than $12.5 billion at their disposal. Amherst Pierpont Securities analyst Siobhan Morden puts the figure at just $6.5 billion.
Bond investors have largely been mentally prepared for default, and the prices of some overseas bonds issued by the Argentine government have fallen to less than 40% of their face value. But the dire state of the country’s foreign exchange reserves suggests a default could come sooner than some expect, perhaps soon after President-elect Fernandez takes office in December.
1. Exchange rate impact
The central bank limits dollar purchases to $200 per month from the $10,000 monthly limit imposed in September, aiming to stabilize the peso and blocking the flow of the bank’s foreign reserves. Following the central bank’s announcement on October 28, the peso gained more than 3% and was trading at 63 to the dollar on exchanges.
2. Export taxes on agricultural products may increase
For Argentina, as the economic crisis further deepens, strengthening the export of agricultural products cannot be ruled out as one of the important means to solve its foreign debt. However, Argentina’s foreign exchange reserves are currently tight, and the new government’s ability to “generate money” will be put to the test. Increasing export tariffs on agricultural products seems to be the only way to raise funds to repay Argentina’s maturing loans from the IMF.
3. Buyer’s payment delay
Currently, Argentina’s foreign exchange controls are relatively strict. Companies exporting goods to Argentina need to pay attention to the situation of foreign exchange collection. Transfers to foreign countries will be subject to restrictions. Larger restrictions, amount and timeliness will be seriously affected. When working with Argentine buyers, you must not lower the bottom line of payment methods.
4. Anti-dumping is serious
Since this year, Argentina has launched 9 anti-dumping investigations against China, and has also targeted microwave ovens, cotton cloth, wheels, spring shock absorbers, and sunglasses. , spectacle frames and corrective glasses, thermos bottles, hand pliers, etc. are levied high anti-dumping duties. It is recommended that foreign traders exporting to Argentina conduct market research in advance to ensure that the products are not included in anti-dumping and countervailing duties.
Introduction to Argentina
The Republic of Argentina (English: the Republic of Argentina, República Argentina, Spanish: República Argentina), referred to as Argentina, is a presidential federal republic consisting of 23 provinces and the federal capital (Buenos Aires). Located in the southeastern part of South America, it borders the Atlantic Ocean to the east, Antarctica to the south, Chile to the west, Bolivia and Paraguay to the north, and Uruguay and Brazil to the northeast.
Population: As of the end of 2013, the country’s population was approximately 41.45 million, ranking 31st in the world. Among them, women accounted for 51.06% and men accounted for 48.93%. The population density is low, approx.There is a supply shortage.
2. Taxis can’t run without gas, so people go to the black market to buy meat
According to a report by Agence France-Presse on November 17, during frequent protests, The people most affected are the local people. Almost every gas station in the capital, La Paz, is out of gasoline. Protesters also blocked the main road from La Paz to the neighboring city of El Alto and El Alto’s oil refinery, disrupting gasoline and natural gas supplies throughout the La Paz region. In addition, agricultural supply routes around La Paz were also blocked by protesters. This also led to another result-the people of La Paz could hardly afford to eat.
Introduction to Bolivia
The Plurinational State of Bolivia (Spanish: Estado Plurinacional de Bolivia), referred to as Bolivia, is a landlocked country located in the center of South America, surrounded by Brazil , Peru, Chile, Argentina, and Paraguay are five neighboring countries. The country is dominated by plateau terrain, with an average altitude of more than 3,000 meters, making it the country with the highest average altitude in the world.
Population: Total population 10.624 million. The urban population is 6.574 million, accounting for 65% of the total population, and the rural population is 3.454 million, accounting for 35% of the total population. Bolivia is a multi-ethnic country, mainly composed of indigenous peoples, including Indians of various ethnic groups; the Mestizo people: the mixed descendants of European and African immigrants and indigenous people (accounting for about 30% of the population of Bolivia) and European and African immigrants ( accounting for about 15% of the total population).
Capital: The legal capital is Sucre, and the actual government seat is La Paz.
Language: Spanish, Quechua and other 36 Indian national languages.
Colombia–Unrest caused by dissatisfaction with pension policies
On November 21, more than 200,000 people took to the streets in Colombia. Demonstrators occupied all walks of life in Colombia, including students, teachers, trade union organizers, etc., conducting large-scale protests and demonstrations. They demand that the government maintain the minimum wage and pension rights of young people and oppose President Duque’s new national development plan.
Although the government has not officially announced the implementation of this reform measure, it has become a “flash point” for public dissatisfaction with President Duque. Since Duque took office in August 2018, his approval rating has dropped to 26%
Multiple foreign media reported that this was one of the largest protests in the country in recent years . The protests were largely peaceful but turned violent in the evening.
In Bogotá, Colombia’s capital, protesters smashed windows, vandalized bus stops, set up roadblocks and threw rocks at police. Riot police deployed armored vehicles and fired tear gas into Bogota squares in response to violence by protesters.
Police said that about 207,000 people participated in demonstrations across the country, at least 36 violent elements were arrested, and 37 military police and 42 civilians were injured. They do not rule out the possibility of a further increase in the number of casualties. sex. The Colombian government temporarily closed its borders with neighboring Venezuela and Ecuador that day.
On November 22, Colombian President Iván Duque ordered a curfew in the capital Bogotá from 9 p.m. that night. Duque announced on the same day that the government will launch a “national dialogue” next week to find mid-term and long-term solutions to social injustice and corruption. Duque determined that there is “space” for current dialogue, which can help “narrow social gaps, fight corruption more effectively” and build a peaceful and law-based society. “
1. Violent demonstrations seriously affect people’s travel and commercial activities
In the capital Bogotá, the subway and rapid transit are the main public transportation means for local people to travel daily. During this parade, many violent elements deliberately sabotaged nearly 100 bus stations to varying degrees, causing great trouble to local people’s travel.
In the past few days of demonstrations, there have also been incidents of robberies targeting stores. Although many stores have taken protective measures, their operations have still been greatly affected.
2. The border is closed and freight is greatly restricted
In response to this nationwide demonstration, the Colombian government closed all land borders with neighboring countries, and all flights from neighboring Guador, Peru, Brazil and Both land and sea access from Venezuela to Colombia will be restricted. Due to the uncertainty of this incident, goods exported to Colombia may be delayed to varying degrees.
Introduction to Colombia
The Republic of Colombia (Spanish: República de Colombia), referred to as Colombia. Colombia is located in the northwest of South America, bordering Venezuela and Brazil to the east, Ecuador and Peru to the south, Panama to the northwest, the Caribbean Sea to the north, and the Pacific Ocean to the west.
Population: 2014 Colombia has a total population of 46.4 million, making it the second most populous country in South America. The five cities of Bogota, Medellin, Cali, Barranquilla and Cartagena are the main concentration areas of Colombia’s population. Colombia’s ethnic groups are local The result of a mixture of indigenous Indians, Spanish colonists and African slaves.
Capital: Bogotá.
Official language: Spanish.
��The result of a mixture of native Indians, Spanish colonists, and African slaves.
Capital: Bogota.
Official language: Spanish.
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