The South American country is the world's top exporter of
soy oil and meal and the No. 3 for corn, which are the main
sources of its foreign currency income. Harvests, however, have
been battered by one of the country's worst droughts in history.
"The currency drain is spreading daily and this accentuates
concerns about weak net reserves," Buenos Aires-based economist
Gustavo Ber told Reuters, adding moves by the government to spur
grains exports could help "offer a breather" to the trend.
A government official on Thursday said that the country
would roll out a preferential exchange rate for farmers to
encourage exports of key cash crop soy and other products
starting next month, which have all been hit by drought.
"The accelerated deterioration of the BCRA's (central
bank)international reserves has forced (Economy Minister Sergio)
Massa to launch a new exchange rate scheme in the coming days,"
clearing and settlement agency Cohen said in a note.
"The so-called agricultural dollar will aim to increase the
supply of foreign currency in the exchange market."
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Argentina: dollar drain Argentina: dollar drain (Interactive) ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Walter Bianchi and Jorge Otaola; Writing by Adam
Jourdan; Editing by Sandra Maler)
By Walter Bianchi and Jorge Otaola
BUENOS AIRES, March 31 (Reuters) - Argentina's central
bank dollar sell-off is set to end March at the fastest monthly
pace since late 2019, according to official data and traders,
underscoring the precarious position for the indebted country as
drought hits its vital grains exports.
The bank will end the month having sold $1.9 billion in
foreign currency to meet payments and prop up the embattled peso
currency's crawling peg. That would be the most sold in a month
since October 2019 when the country was fighting a market
crisis.
The drain of dollars comes as Argentina hopes to get
approval later on Friday from the International Monetary Fund's
(IMF) board for the fourth review of its $44 billion loan
program, which will unlock some $5.3 billion in funds.
Argentina, which is also meant to pay the IMF $2.7 billion
on Friday, has been pushing the lender to ease economic targets
related to accumulation of reserves, arguing that drought has
hit grain income and rising global prices have pushed up costs.
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