- Title: ARGENTINA: Argentina announces price rollback to tackle soaring inflation
- Date: 30th January 2014
- Summary: BUENOS AIRES, ARGENTINA (RECENT) (REUTERS) CURRENCY EXCHANGE STORE VARIOUS OF CURRENCY EXCHANGE RATES BUENOS AIRES, ARGENTINA (JANUARY 29, 2014) (REUTERS) VARIOUS OF ECONOMY MINISTER AXEL KICILLOF, CABINET CHIEF JORGE CAPITANICH AND TRADE MINISTER AUGUSTO COSTA DURING NEWS CONFERENCE (SOUNDBITE) (Spanish) ECONOMY MINISTER AXEL KICILLOF, SAYING: "For those goods widely used product prices will be rolled back because they were tied to the dollar in some cases. In the case of whitegoods and electronics, prices will be rolled back and with a cap at a 7.5 percent (price) increase from January 1. In both cases we have proceeded with a study phase of imported components, of the cost situation, but we're giving a certainty on these prices which we have agreed today."
- Embargoed: 14th February 2014 12:00
- Location: Argentina
- Country: Argentina
- Topics: Economy,Politics
- Reuters ID: LVA2ZKVOMYUY4CNMPE9KY99S0OA7
- Story Text: Argentine Economy Minister Axel Kiciloff announces government measures to reign in inflation on electronic devices and hardware as Latin America's third-largest economy grapples with a falling peso and soaring inflation.
Argentina announced on Wednesday (January 29) that it had reached a deal with petrochemical, steel and electrodomestic sectors in the country to roll back prices and cap price increases as Latin America's crisis-prone No.3 economy struggles to reign in soaring inflation and a falling national currency.
Economy Minister Axel Kicillof told media in Buenos Aires that sectors will roll back prices to January 21 levels and a 7.5 percent cap on price increases for the year.
The move comes just days after the country's sudden relaxation of currency controls saw a dramatic fall in the peso, reflecting a more than 20 percent drop in the official peso rate so far this month and further upward increases on the price of imported goods.
"For those good widely used products prices will be rolled back because they were tied to the dollar in some cases. In the case of whitegoods and electronics, prices will be rolled back and with a cap at a 7.5 percent (price) increase from January 1. In both cases we have proceeded with a study phase of imported components, of the cost situation, but we're giving a certainty on these prices which we have agreed today," said Kicillof.
The move is the latest measure by Argentina's government to control soaring inflation which, according to private analysts' estimates, rose about 25 percent in 2013.
Keen to show it is serious about reigning in price increases, Argentina's cabinet chief Jorge Capitanich said those breaking the deal will be punished.
"There are four factors which could be applied for the violence of the price agreement; fine, closure, opening imports and removing economic benefits, mainly energy and credit assistance. Consequently, the instruments need to be seen as incentives. The stimulus is very clear. The policy of monitoring and the supervision of prices and penalties when they're effectively not followed," he said.
If Argentina reports 30 percent inflation this year, as private analysts expect, it would mark the fastest rate since the 2002 crisis, when inflation reached 41 percent.
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