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To: Giordano Bruno who wrote (390726)	7/21/2009 11:08:59 AM
From: Box-By-The-Riviera™	Respond to of 436258

the innocent act of buying another currency will get you BUENOS AIRES (Dow Jones)--In a new bid to tighten control over the foreign-exchange market, the Argentine government will start checking the tax records of every person who tries to buy dollars, the director of the tax collection agency, AFIP, said in a radio interview Tuesday. "We're focusing our work on tax evasion in all segments," AFIP Director Ricardo Echegaray said. Echegaray said the government will require individuals to justify their income and prove that they have legally earned enough money to buy a certain amount of dollars or other currencies. He said AFIP has been working with the Argentine Central Bank for months to create a way of determining whether people have the justified "fiscal capacity" to participate in the exchange market. "If you go buy dollars today, in AFIP we're going to be able to say, 'Oh, this person is buying an amount that surpasses his purchasing power.'" Echegaray said. Though Echegaray focused on AFIP's tax-evasion aims, analysts said the new measure really aims to help the Central Bank more easily control the peso's value. "More than anything else, this is to diminish the demand for dollars," said Fernando Izzo, an analyst and currency trader at ABC Mercado de Cambios. "I don't think it'll do much to control the market because it won't affect business demand, but will surely slow the sale of dollars to smaller retail buyers. It will slow sales at bank windows to individuals." Over the past year especially, the Central Bank has worked with other government agencies to crack down on the market. Banks say government tax officials closely observe their transactions and often imply that if Central Bank orders aren't followed, the banks could face tax trouble. Central Bank official say they're simply enforcing exchange-rate policies. The monetary authority has kept tight control over the peso, making sure that its value doesn't fluctuate abruptly as have other currencies in the region. "For now, the central bank has the currency very dominated in a band that ranges between ARS3.80 and ARS3.81 (to the U.S. dollar)," Izzo said. "After the recent congressional election, it wanted to send a signal to the market that it could control the exchange rate." Izzo said the peso is likely to decline slowly in value until it reaches around ARS4 or ARS4.05 by year's end.