Argentina offers tax amnesty to draw hidden cash, avoid devaluation BUENOS AIRES, May 8 (UPI) -- Argentina's latest effort to tease out billions of U.S. dollars said to be held by citizens through sweeping tax breaks and interest earnings received lukewarm response, though this may change. Argentine citizens are said to be holding the greenback in illegal stashes as a hedge against the Argentine peso's unstable performance, a runaway inflation and general distrust of the government's fiscal and monetary policies. Official estimates say at least $160 billion is held in cash at home and abroad by Argentines who have yet to declare their holdings. President Cristina Fernandez de Kirchner announced a sweeping tax amnesty for undeclared cash reserves, which includes opportunities to convert those assets into interest-earning bonds. With months to go before the amnesty can take effect, public response remains uncertain. The president's wish now must be tabled before congress as new legislation to assure hidden cash holders on at least two counts -- safety from prosecution and security of assets offered up in return for interest-earning investment bonds. It's far from clear if Argentine public response to the government's offer will be large enough to enable the Central Bank to head off a devaluation of the peso, rumored for months. Fernandez wants Argentines to bring undeclared cash as well as offshore funds back into Argentina's financial system. Analysts remain skeptical about the asset holders' response. Least likely is repatriation of funds held abroad by Argentine citizens or their businesses, analysts said. Fernandez hopes the recovery plan will help the government's effort to replenish and shore up foreign currency reserves and ease pressure on her to order the Central Bank to devalue the national currency. The U.S. dollar has been ascendant on Argentina's informal currency markets. Commanding more than 10 pesos, the dollar's free market parity represents a 45 percent increase at the peso's expense in less than five months. Officials say they are confident a series of government bonds in key sectors and carrying an attractive interest rate will help draw the cash out of secret holds. Economy Minister Hernan Lorenzino said new financial instruments such as an Argentine bond for saving and economic development and investment certificates could draw out the hidden dollars. He called it a plan "to incorporate idle resources in the Argentine production model." Fernandez has suffered lately in approval ratings because of repeated criticism of her economic policies. Last year's nationalization of YPF, majority-owned by Spain's energy major Repsol, frightened away investors. The government's lackluster success fighting inflation has also affected economic prospects. Lack of government transparency about future inflationary projections and the possibility of a peso devaluation have kept international investors away from Argentina.