Argentina's central bank puts off import payments as cash crunch worsens

BUENOS AIRES, April 20 (Reuters) - Argentina's central bank approved a payment delay through the end of the year for imports of services and freight transport worth $2 billion in an effort to manage a severe shortage of foreign currency in bank coffers needed for such transactions. South America's second-largest economy after Brazil is struggling with a prolonged financial crisis marked by triple-digit inflation and made worse in recent months by a historic drought that hit the country's main cash crops, which usually attract significant flows of U.S. dollars to the central bank. The center-left government of President Alberto Fernandez has over several months launched measures meant to boost the inflow of foreign currency as well as to buck up a steadily weakening local peso currency, but so far the efforts have mostly met with disappointment. The latest move by the central bank, which is closely aligned with Fernandez's government, aims to staunch the bleeding and put a cap on the flight of foreign capital. The bank said in a statement that it "approved measures... that together represent a postponement of payments in foreign currency for $2 billion until the end of the year."

Earlier on Thursday, Argentina's local currency sank in a widely-used parallel market to a record low of 438 pesos per U.S. dollar . The tightly-controlled official exchange rate stands at 218 pesos per greenback, about half the value of the black market rate. (Reporting by Nicolas Misculin; Editing by Kim Coghill)

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