According to sources from Reuters, the central bank bought a total of $855 million in May, representing the largest monthly purchase of greenbacks since last September. Argentina’s economic outlook recently improved following a series of incentivized grain exports via a preferential exchange rate which yielded a total of $5 billion. The policy ended on Wednesday. Argentina was also recently in the news for buying imports with Chinese Yuan (instead of US dollars) in an effort to preserve its reserve of greenbacks.
Wed, May 31, 2023 at 3:18 PM EDT
(Recasts, adds monthly currency purchase, details on export incentives)
BUENOS AIRES, May 31 (Reuters) – Argentina’s central bank purchased $451 million of foreign currency on Wednesday to bolster its dwindling hard currency reserves, after daily sales from farm exports topped $1 billion, providing some relief for the country’s hard-hit finances.
The currency move on Wednesday marks the biggest such purchase since late December.
In May, the central bank bought a total of $855 million, according to traders consulted by Reuters, the largest monthly purchase of greenbacks since last September.
The government has incentivized grains exports – Argentina’s main source of dollars – in the last two months with a preferential exchange rate, helping bring in over $5 billion in total. That measure formally ended on Wednesday.
The South American country’s prolonged economic slump has taken a toll on the bank’s foreign currency reserves, which are needed to pay down debt as well as to finance many imports. (Reporting by Walter Bianchi and Jorge Otola; Writing by Carolina Pulice; Editing by David Alire Garcia)https://finance.yahoo.com/news/1-argentine-central-bank-logs-191829504.html
The comments section on Yahoo provided some added speculation on the significance of this trend:
7 hours ago
2 hours ago
Borrow US$ from China and pay back in RMB – It is a trend.From comments section Yahoo finance – https://finance.yahoo.com/news/1-argentine-central-bank-logs-191829504.html