[ad_1]

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.

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.”

Argentina: dollar drainhttps://tmsnrt.rs/3K00Poz

Argentina: dollar drain (Interactive)https://tmsnrt.rs/3M5FXyQ

(Reporting by Walter Bianchi and Jorge Otaola; Writing by Adam Jourdan; Editing by Sandra Maler)

((adam.jourdan@thomsonreuters.com; +54 1155446882; Reuters Messaging: adam.jourdan.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *