"Measures continue to be added to mitigate exchange rate tensions while net reserves of the central bank continue to decline to critical levels." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Argentina: reserves drain Argentina: reserves drain (Interactive graphic) ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Jorge Otaola; Editing by Adam Jourdan and Daniel Wallis)
Messaging: adam.jourdan.thomsonreuters.com@reuters.net)) By Jorge Otaola
BUENOS AIRES, May 3 (Reuters) - Argentina's central bank
reserves are at their lowest level in almost six years, official
data show, as a painful drought stymies key grains exports and a
weak peso currency forces authorities to spend dollars to
support it.
Preliminary data from the central bank shows gross reserves
at just over $35 billion, the lowest since the middle of October
in 2016, which comes as the government battles inflation over
100% and after a volatile week for trading in the peso.
The drain in reserves has led Argentina to tighten capital
controls, roll out incentives to spur soy sales and open talks
with the International Monetary Fund (IMF) over easing reserve
accumulation targets as part of a $44 billion debt deal.
The reserve drop of some $4 billion since the end of March
and $9.5 billion this year, has been compounded by one of the
worst droughts in the country's history, which has battered its
soy and corn crops, the main drivers of export dollars.
"Absolutely all the macro fundamentals are much worse than
in previous currency crises," said consultancy Invecq.
Economist Gustavo Ber said that income from grains sales
would be key, with the government hoping a preferential "soy
dollar" exchange rate could spur more sales this month after
falling short of expectations in April.
"We're waiting for larger settlements in the 'farm dollar',
and for an accumulation of foreign currency," he said.
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