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Argentine shops won't sell goods

The computers on display at Compucentro SA, a store on Maipu Street in Buenos Aires, aren't for sale -- unless the buyer can pay with dollars.

"I sincerely wouldn't sell a computer today because on Monday we have no idea what the pesos will be worth," said salesman Marcelo Gianoni.

Eduardo Duhalde, Argentina's fifth president in two weeks, said he will devalue the peso to make domestic manufacturers more competitive with foreign producers and pull the economy out of recession. Stores such as Compucentro that sell imported goods say they won't accept pesos because they may be worth as much as 40 percent less on Monday.

The demand for dollar payment by storeowners, along with government restrictions on cash withdrawals from banks, is deepening a three-year recession and may lead to more bankruptcies and push unemployment to a record high, said Rodrigo Sacca, an economist at Stone & McCarthy Research Associates.

Evidence of a decline in retail sales since 1998 can be seen across the street from Compucentro, where the windows of the Jungla bookstore still display old clearance sale signs and unopened mail piles up outside its doors. On both sides, metal gratings shield other closed stores. Their windows, plastered with credit card stickers, carry `for rent' signs.

"These streets have been decaying for months now, and they can only get worse," said Gabriela Berra, who sells sunglasses on a pedestrian walkway one block away.

Foreign exchange houses along San Martin Street, four blocks from the presidential palace, were closed, with guards posted at their doors. Dealers inside said they were unwilling to do business until the new value of the peso was known. On the pavement outside, freelance moneychangers offered to buy dollars at between 1.20 pesos and 1.4 pesos. Some offered to sell dollars at 1.4 pesos.

The peso has been set at one per dollar for the past 10 years.

The economic plan, which will include a new exchange rate, will be announced today, approved by Congress over the weekend and come into effect on Monday, said cabinet chief Jorge Capitanich.

Duhalde has promised measures to help local manufacturers and protect the savings of Argentines. Limits on bank withdrawals that were introduced last month to stem a run on deposits triggered rioting that forced President Fernando de la Rua to resign on Dec. 20.

In Paseo Alcorta, a shopping mall in Buenos Aires' Palermo district, price increases of as much as 25 percent didn't deter customers who were spending their pesos before they were devalued.

Some shoppers rushed to buy imported goods at supermarkets such as Carrefour SA, which hadn't adjusted prices.

"I'm trying to get rid of my pesos before Monday, because we just don't know what will happen then," said Oscar Awada, a 47-year-old car salesman, as he carted a television to the Carrefour checkout.

At Musimundo SA, a chain of music stores owned by The Exxel Group, a Sony Corp mini-stereo now costs 562 pesos compared with 449 pesos at the start of the week. Prices of locally made compact discs were unchanged.

Pharmacies were planning to raise the price of drugs by as much as 30 percent.

"We're just waiting for head office to send us the disk with the new prices," said Daniela Martina, a saleswoman at Farmacia Alcorta.

``Most places have already raised their prices.'' Other retailers say their costs will surge on Monday as a weaker peso means they have to pay more for imported goods.

The La Orquidea florist on Paraguay Street buys roses from Colombia and tulips from the Netherlands. Flower seller Angelica Bacino says devaluation will drive up her costs.
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