off-the-wire

UPDATE 1-IMF approves lower net reserves accumulation target in Argentina program

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds details, context) By Rodrigo Campos and Jorgelina do Rosario NEW YORK, April 1 (Reuters) - The International Monetary Fund (IMF) executive board approved changes to Argentina's net reserves accumulation target set in their $44 billion program as the agriculture powerhouse faces a severe drought seen pummeling its exports. Easing the reserves accumulation was part of the fourth review under the country's $44 billion program, with Argentina looking to soften expectations on its economy. The board "approved modifications to the reserve accumulation targets to partially accommodate the impact of the severe drought," the IMF said in a statement, without detailing the new targets. The change in the targeted reserves lowers the bar for the South American economy to pass future IMF reviews. The current review, based on targets through December, was "met with some margin" according to the fund.


But weighing on further forex accumulation, Argentina's central bank sold in March the largest monthly amount of dollars since October 2019 as it struggles to prop up the local peso currency.


The decision comes as 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, is facing the worst drought in at least six decades. A government official said on Thursday that Argentina would roll out a preferential exchange rate for farmers to encourage exports of key cash crop soy and other products starting next month. The IMF review included "waivers of non-observance associated with the introduction of policy measures that gave rise to new exchange restrictions and multiple currency practices." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Argentina: dollar drain ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Rodrigo Campos in New York and Jorgelina do Rosario in London; additional reporting by Jorge Otaola in Buenos Aires and the Bengaluru newsroom; editing by Jonathan Oatis and Franklin Paul)

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